What the "fiscal cliff" means for you

December 31, 2012 6:20:52 PM PST
You've been hearing a lot about the "fiscal cliff" but what exactly does that mean for you if we do indeed "go over?"

The most immediate change you're going to see - and this change will remain in effect even if or when a deal is finally reached - is the 2% payroll tax cut is expiring and no one anticipates it'll be extended.

That means if you make $50,000 a year, you'll get about $83 less in your check every month.

If you make $100,000, expect your paycheck to shrink by about $167 a month.

This is just one of many changes all of us need to brace ourselves for.

Going over the 'fiscal cliff' will raise taxes on nearly 90% of Americans.

And one of the big issues is the Alternative Minimum Tax.

If Congress doesn't approve a patch for the AMT, Joe Murray of the First Financial Group says, "[for] most middle income class people, it would add another $3,700 a year to their tax burden."

And expect a delay in getting your tax refunds.

Millions of taxpayers won't even be able to file their 2012 returns until at least the spring.

"There's really not going to be a way to have the proper tax forms done, the IRS tax systems won't be ready, there just won't be a way to do this thing until at least March, possibly April," Murray said.

And finally, unemployment benefits are likely to be extended but if they're not, more than 2-million long-term unemployed will run out of benefits at midnight.

And more unemployment benefits would run out next year.

One more thing to anticipate going over the cliff long-term means the poorest Americans will see two key tax credits disappear - the earned income tax credit and the child tax credit.

That's thousands of dollars families won't be able to count on anymore.

Here's a link to the calculator that'll show you exactly how various tax policies will affect you: http://calculator.taxpolicycenter.org/