Fiscal Cliff Could Effect Your 2012 Taxes, Too - WLNS TV 6 Lansing - Jackson | Your Local News Leader

Fiscal Cliff Could Effect Your 2012 Taxes, Too

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As the clock ticks toward a new year, there's word from capitol hill that there will be no vote to avoid going over the fiscal cliff.

Monday afternoon, Senate Republican Leader Mitch McConnell and President Obama both said a deal is in sight, but a main sticking point is the Bush-Era Tax Cuts. Sources say a tentative agreement would extend tax cuts for families making $450,000 a year and individuals making $400,000.

 

Certified Public Accountant Steven Patch of Lally Group in Jackson is also watching the clock tick as he takes more calls from people worried about what's to come.

 While much of the fiscal talk has been focused on the effects come 2013, Patch says something that's been lost is what will happen to your 2012 taxes. And for some who arent expecting it, it could be paying more. Every couple years, Congress comes up with a new exemption for the alternative minimum tax and this year they haven't done that.

 

"So it's reverted to a relatively small amount, so we've had a number of people that have been subject to this alternative minimum tax that haven't been in the past," said Patch.

Aside from higher tax rates, Patch says in 2013, we could see reduced tuition credits and deductions, capital gain rates could change, the marriage penalty issue could return and there could be significant changes in estate tax. With all of this, also comes added frustration when tax season rolls around.

"It's going to require a lot more time and effort for people who do their own returns. The software needs to get caught up and everytime there's a change, there's a lot of errors made," Patch said. "So theres a lot more mess to contend with as this all goes forward."

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