How the Fiscal Cliff Could Impact Mid-Michigan - WLNS TV 6 Lansing - Jackson | Your Local News Leader

How the Fiscal Cliff Could Impact Mid-Michigan

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President Obama called on law-makers to come together to avoid a fiscal cliff in a special announcement Friday. The fiscal cliff is a combination of the Bush era tax cuts about to expire and the automatic budget cuts that are set to happen January first if the White House and Congress do nothing.

The White House says the president will veto any bill that extends tax cuts to those making over $250,000.

Economists warn that if nothing is done to divert the path of the fiscal cliff, then the country could be thrown into another recession.

 

So what does this mean for Mid-Michigan?

It all depends on your income and deductions. Here's a look at how the changes would affect the average American family.

DailyFinance.com did the math for a family making just under $50,000 a year. After the standard deduction, the family would see a jump of more than $1,500. Of course, no one pays the full tax rate, but many of these deductions would vanish too. For example, the Child Tax Credit would be cut in half, adding $500 to your tax burden.

If our hypothetical family has a child in college, it'll feel the pinch even more. A $2,500 credit would expire in January. Taking its place an $1,800 credit instead--that's a $700 difference. That credit is only good for two years not four.

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