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Congress passed the fiscal cliff deal last night. As part of the deal most of the Bush tax cuts set to expire at the end of 2012 will remain in place for people earning less than $400,000 ($450,000 for couples). If you earn over those amounts in 2013, your tax rates will go up.
Also included in the fiscal cliff deal are various changes to capital gains, estate taxes, the AMT, unemployment insurance, and various deductions and credits.
Here are the highlights of the fiscal cliff tax deal:
While there were tax changes in the deal, some current outstanding tax increases were not included:
Your first few paychecks this year might also need some sorting out. The IRS gave the go ahead to employers to proceed with issuing paychecks with higher withholding by February 15. However, if your workplace already cut you a check they may or may not have used the correct tables. In addition, the IRS released a statement last month about possible 2013 IRS Tax Refund Delays if the AMT wasn’t patched. We’ll be keeping a close eye out for their next news release about possible delays from the last minute fiscal cliff deal.
You can read the full H.R. 8 bill for more details. The President said he would sign the bill into law.