Deductions Limits Will Affect Many Americans, Not Just The Wealthyby Gerri Willis
Trying to figure out how the Fiscal Cliff legislation is going to affect you?
Maybe you went to the IRS website for guidance.
Here's what they had to say...
"The IRS is currently reviewing the details of this week's tax legislation and assessing what impact it will have on this year's filing season. The IRS will soon make available additional information..."
Interpretation: we don't know yet either.
Now, my guess is there are a lot of you out there who looked at the coverage of the law and said, “I don't have to worry about this because I don't make $450,000.”
By the way, that's the level at which Democrats say you are rich and should pay higher taxes.
Well, friend, I am here to tell you that does not matter. You may well pay more anyway.
Yesterday, we talked about the increase in payroll taxes that is going to hit you, and hit you hard, no matter how much you make.
Then there's this: the law will cut the value of personal exemptions and itemized deductions, breaks you probably don't even think about. Ones for mortgage interest, state-income tax payments, and charitable deductions. The limits on those deductions will hit twice as many people as the income tax change. If you earn $250,000 as a single person, or $300,000 as a married couple, or more, you will face these new limits.
This is not going to be chump change. It will bring in $150 billion over the next decade, and it will impact people with a lower income- those making $250,000 for singles, and $300,000 for married couples.
So you see, in the end, President Obama really did get his tax increase on the successful among us who make more than $250,000, you may just not have known it!
I guess it's a good thing that I made my charitable contributions at 11:50 P.M. on New Year’s Eve, right before the ball dropped!