What the fiscal cliff means for your family in the Ark-La-Miss - KNOE 8 News; KNOE-TV; KNOE.com |

What the fiscal cliff means for your family in the Ark-La-Miss

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MONROE, La. (KNOE 8 News) - Fiscal cliff talks have many wondering how the situation will affect you and your family. Congress is grid-locked over finding a solution to avoid what is being called "The Fiscal Cliff". The cliff refers to when Bush-era tax cuts will expire and new tax regulations set in.
If you don't think this affects you, think again.

If Congress fails to find a solution, taxes could go up for every single American including here in Ouachita Parish. "Considering the federal government and the deficits, most people will probably pay a little bit more," said Tim Green, who is a tax expert at Monroe based CPA firm, Allen, Green, and Williamson.

He says unless Congress acts, changes are in store. The most noticeable effect will be a smaller paycheck in 2013. That's when the federal government will take an extra 2% of your money for social security taxes.

"That's going to immediately impact everybody January first on their payroll checks," said Green. Income tax rates are also scheduled to rise. An internal study by Green's firm found the new rates will affect 10% of your taxable income.

That means a household making 50-thousand dollars will take home 1-thousand dollars less per year. On top of that, the child tax credit will be reduced by half, meaning you will get 500 dollars less for each child. These are only a few of the changes and while nothing is set in stone, until Congress acts, Green advises everyone to start saving money.

"The conservative approach would be to try to put a little aside to cover whatever the resolution with congress is and what they decide to do," said Green.

Congress has less than five days to come to an agreement before the tax hikes and spending cuts kick in. Green predicts there will be a delay in filing returns this tax season because the IRS is holding up on issuing tax regulations until congress settles on a solution.

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