Now that the “fiscal cliff” crisis has been averted and the dust is settling, we see that taxes for most Americans are going up. The wealthy 2% will see their tax rates increase and the other 98% will see their taxes rise because the payroll tax cut just ended.
A CNN Money article titled: “How Much More Will You Pay” provides a useful chart from the Tax Policy Center showing how much tax liabilities for most Americans will increase beginning this year. The following chart is a helpful guide for taxpayers so they won’t be surprised by the increases come tax day!
Those who are examining this subject closely are pointing out the challenges facing tax professionals as they attempt to interpret the new tax calculations. CNN Money posted an article by Allan Sloan Senior Editor at Fortune titled: “Good luck estimating your new tax rate!” that highlights the difficulty he and his long time tax professional are having in determining the tax rate Sloan and his wife will pay after rates increase. The article suggests that most Americans (including Sloan) don’t know how much they pay in taxes on each extra dollar of income earned. Even if they did, the tax code is so complicated and full of contradictions they probably won’t have any luck figuring it out on their own.
It’s clear there is quite a bit of uncertainty out there. I point to these articles to provide information and to remind taxpayers that because of this uncertainty, they will want to avoid future tax problems at all costs. Taxpayers who do not already do so, may want to consult a qualified tax professional this year to get some tax help. A tax expert can understand and analyze the more complex tax code and its changes to prepare their tax returns. This preventative measure could help avoid an IRS audit or an unexpected tax bill for back taxes owed to Uncle Sam.
More Tax Help, IRS News and Tax Relief Tips:
- Ask the Certified Tax Specialist – Small Business Back Taxes
- IRS Practices Scrutinized This Tax Season
- IRS Holds Taxpayers Responsible – No Matter What
- IRS Tax Help Basics for the Self-Employed
- Tax Help for IRS Scrutiny-Retirement Income