Good Luck Figuring out Taxes
Presented by Bobbie Blueblood
With all the political haggling over the “Financial Cliff” this past month how is a person to figure out how much he may have to pay in Federal taxes come April 15th next year in 2013? It’s bad,the President won on a platform to increase taxes on the wealthiest individuals but the Republicans refuse to give in and allow the richest people in the country pay a little more in taxes.
In an article by John W. Schoen of NBC News he explains the dilemma people face trying to estimate taxes for next year.
Most financial experts advise that year-end is a good time to do a little tax planning by estimating how big a bite Uncle Sam is going to take next April 15.
This year, about the only advice they can give is: “Good luck with that.”
With Congress and the White House locked in the final throes of an epic, two-year budget battle, estimating your taxes this year is roughly equivalent to playing golf at night under a new moon.
Not only are Democrats and Republicans playing chicken with the Jan.1 deadline to avoid the so-called “fiscal cliff,” the terms of their conflicting proposals are shifting as the debate drags on.
That means the tax code’s dozens of exemptions, deductions and exclusions – each of which hits millions of taxpayers in different ways – have created a geometric level of complexity to a process that already flummoxes the vast majority of Americans.
The biggest land mine looming at the bottom of the fiscal cliff is the so-called Alternative Minimum Tax, originally designed to minimize deductions for the wealthiest taxpayers. Because Congress forgot to include a provision that raised the dollar definition of “wealthy” over time, the AMT is on course to rip a new financial hole through some 28 million tax returns for the first time this year.
“That would come as a big shock to some people because it’s not reflected in their 2012 withholding at all,” said Tax Foundation analyst Nick Kasprak. “So if you expect a $2,000 refund, suddenly you’ll owe $3,000 if you haven’t paid the AMT before.”
Click the above link to read the whole article.
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