Preparing for the Fiscal Cliff
By: Katrina Irwin
Updated: October 22, 2012
Steve Stokes CPA with Stokes, Visca & Co., LLP. joined Mark Gruba on News 8 at Sunrise Monday morning.
He talked about the impending "Fiscal Cliff" and what every can do to protect their money.
The "Fiscal Cliff" is the result of expiring Bush-era tax cuts.
Some of the main expiring provisions include:
FICA Tax Increase - for starters the FICA portion of your payroll tax withholding is increasing from its current 4.2% to 6.2%.
Long-Term Capital Gains Rates Increases - right now the capital gains rate is 0% and 15% depending on your bracket. The capital gains rates are increasing to 10% and 20%.
Regular Tax Rates are also increasing to a maximum tax rate of 39.6%.
Tuition Credit Expires - many taxpayers have been enjoying a $2,500 credit for college tuition.
Child Tax Credit - this credit is going from $1,000 to $500 per child.
