If Obama (I would be saying Romney here if he was elected) and Congress can't get something together, there are a few tax cuts that will expire.
-Payroll Tax - that amount taken out of your paycheck is currently 4.2%, it will be raised to 6.2%
Impact: All working taxpayers
-Tax Rates - the rates for ALL Americans (not JUST the rich, not JUST the middle class) will increase ranging from 3-5% across the board. (see the table below)
Impact: All taxpayers
-Standard Deduction for Married filing jointly will not be as beneficial.
Impact: Married taxpayers
-Married filing jointly 15% bracket will shrink (forcing many into a higher tax bracket)
Impact: Married taxpayers
-Child tax credit maximum will revert to $500 (currently $1000).
Impact: Lower income taxpayers with children
-Medical expenses will be more difficult to deduct (7.5% floor reverts to 10% floor)
Impact: taxpayers with crazy medical bills
Dependent care expenses - the maximum credit will decrease (from 3,000&6,000 to 2,400&4,800), as well as the portion of expenses counted as a deduction (35% percent to 30% of total dependent care expenses).
Impact: Lower income taxpayers with children
Earned Income Tax Credit (EITC) - Less Americans will be qualified for the credit due to more stringent requirements.
Impact: Taxpayers 25 years of age, lower income, working
Education Credits Expire - time to finish school, because the american opportunity tax credit will expire. This is the credit my student friends are getting (up to $2500) to subsidize our tuition. If you are a student, your tax return is likely to not look so nice when you file in april 2014.
Impact: All students (or parents with dependent students)
2013 Tax Rates:
Tax Brackets (2012 Dollar Amounts) | Marginal Rate | ||||
Unmarried Filers | Married Joint Filers | ||||
Over | But Not Over | Over | But Not Over | 2012 | 2013 |
$0 | $8,700 | $0 | $17,400 | 10% | 15% |
8,700 | 35,350 | 17,400 | 70,700* | 15% | 15% |
35,350 | 85,650 | 70,700* | 142,700 | 25% | 28% |
85,650 | 178,650 | 142,700 | 217,450 | 28% | 31% |
178,650 | 388,350 | 217,450 | 388,350 | 33% | 36% |
388,350 | ... | 388,350 | ... | 35% | 39.6% |
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