The Fiscal Cliff and You

By: Rachelle Baillon Email
By: Rachelle Baillon Email

Monday, December 10, 2012--5:45p.m.
MADISON-- The end of the month is the fiscal cliff deadline that everybody's talking about. And literally the first of January, you could start seeing the effects--if a deal isn't reached, that is.

We spoke with a local tax expert today about the ways a lack of a deal could impact you and your family.
He says the tax rates will take effect in January. And if a deal isn't reached, they'll be going up. Which means, your withholding amount could be impacted starting next month. But, it won't be effective until the following year's return--which is due in April of 2014.

So what will any of this mean for your bottom line?
"With the Bush tax cuts going away with the child tax credits going away, I would assume that family of four with two younger children would be looking at a strong $3,000 if they're making $80,000-90,000 range," said Marshall Mennenga, the owner of Mennenga Tax and Financial.

Other areas you might feel the pinch include education deductions.
Mennenga says currently we have the American Opportunity Credit--but may return to the Hope credit, which he says is about half as valuable as the current credit.

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