11/7/2012 3:45 PM ET|
Fiscal cliff takes aim at your wallet
Only a few things seem clear in all the murk:
Payroll taxes are almost certainly going up. The 2 percentage point cut in Social Security taxes was meant to be temporary, and not even President Barack Obama championed the idea of extending it any further.
An alternative minimum tax fix may be possible. The fix was actually among a bunch of tax provisions that expired last year. There's significant congressional support for extending it, especially since the lack of a fix is now interfering with the 2012 tax filing season, Luscombe said.
Few in Congress like the defense cuts. On both sides of the political aisle, lawmakers are worried about blows to military bases and defense contractors in their districts. Plus, few want to be seen as weakening our national defense.
So what should you do now? You needn't stock up on ammunition and canned goods -- we've survived worse crises than this. But here are some things to consider:
- The stock market could get more volatile if Congress fails to act in time. That doesn't mean bailing on your stocks. Just get prepared for a bumpy ride.
- Tax planning is a big question mark. If it were certain that income and investment tax rates were going up, it would make sense to take capital gains now and move as much income into 2012 as possible while delaying deductions. But the only tax hikes that are virtually certain at this point are the expiration of the payroll tax holiday and the imposition of a new 3.8% Medicare tax on the net investment income of high earners. (Read more here: "Know the facts about the new 3.8% tax.") If you're a high earner or have a lot of investment income or a large estate, you should definitely talk to a tax pro before year's end.
- Your opinion matters. The fiscal cliff has stayed low on the national radar because not enough people have demanded that Congress act. You might want to let your lawmakers know how you feel about the whole mess.
More from Liz Weston:
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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We have a spending problem, not a revenue problem.
The govt gets more than enough money already.
man! I hate to say it, it really pains me to the core of my soul, my being but we, and I mean the hard-working and want to be hardworking but still can't find work people, are outnumbered by the parasites the do-nothings and demanding somethings' vermin that are now infecting our "pround to be American work ethic' it's really depressing, but to re-elect this monster again, after 4yrs of economic tyranny is something I just can't reconcile, this should not have happend again
I don't need to see a headline that says a 'fiscal' cliff is coming, I KNOW THAT!!! WE ALL KNOW THAT!! we are outnumbered people, gotta face the facts, not by much but by enough, Romney almost eked out a win, at least that bastard obama didn't win in a landslide, that gives me hope that we aren't completely dead in the water. but my GOD what's going to happen to this economy in the 4yrs? I don't even wanna look that far ahead!!
is it surprising the market took a nose dive of 312pts!! I'm not in the slightest surprised, and now companies aren't going to be in any hiring mode, holidays you have the temp jobs as usual but what happens after? where are the solid permanent steady jobs? THEY DON"T EXIST, and to you pathetic obamazombies that once again, slam-dunked us into another financial nightmare, I hope you burn in the deepest pit in hell with your messiah and the rest of the loony democrapic party, there's just gotta be a place in hell reserved just for you, in the meantime your not getting any "rewards" your gonna pay the staggering new taxes that are looming, your gonna pay for your own health care, and face fines/taxes, nothing is free azzwipes, your just as cooked as the rest of us and that makes me feel soooooo much better today!
Sorry but it's time to pay the China man his money! We dug the hole now we have to pay, just like everyone else. That means Cutting Big Goverment!!!! Which should have been done 4 years ago but someone thought it would be better to take the China mans money then cut spending! Yes Republicans, It means raising taxes too!!!!!! You do it till our Debt gets down to 0 !!!!!!!
Time to pay up America! The Bill is due!
Tony Florida is talking about something that nobody wants to talk about, and yet we all know it's true. We're going to give California to China and call it even.
But forget about Treasury default. Wait until Grandma and Grandpa don't get a dime when they try to redeem their mature U.S. Savings Bonds.
When you visit Washington, D.C. and stand in front of Lincoln's statue or Jefferson's statue or Washington's statue - well, that beautiful estate on Mount Vernon starts to look like something we need to sell to pay the bills.
Invest in Kleenex. Our Founding Fathers are crying. Many many tears. America came so close.
By the way, shame on MSN. Liz Weston's columns are great, but they appear so infrequently these days.
For those of you who have never visited Greece. Surprise you live there. Living in Illinois my vote was cast but wasted. A state where Barry was elected by dead people.
If we had elections by popular vote those who stayed home and re-elected Barry and the Idiot would have changed the result.
Can you blame them really. You vote knowing that there are hundreds of votes already in the system. I would expect that most of the Dallas Cowboys voted in Illinois.
Yes the freight train is coming and we aren't going to get off the track.
But on the positive side eventually the Chinese will need cheap labor to build their products and we are ready.
Every American needs to figure out how to let the government know that enough is enough, if they take more money we want more accountability, if they tax more we want a bigger say on where it is spent.
Does America need to revolt and protest this ridiculous President.
Look at Americans, many of them are lucky to tie their shoes and get their zipper up after going to the bathroom, and now they have come together to keep Obama in office, which every dictator in the world supports. Obama is a socialist dictator and his voters just empowered him to destroy America.;
Americans need to take a stand against these ignorant liberals all standing around with their hands out hoping for all the free stuff.
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