Averting the "Fiscal Cliff"?

Jan 02, 2013

Congress Approved Eleventh-Hour Agreement with the American Taxpayer Relief Act 2012! 

Yesterday, January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012, averting the "Fiscal Cliff."  The Act allows the Bush-era tax rates to sunset after 2012 for individuals with income over $400,000 and families with incomes over $450,000; permanently "patches" the alternative minimum tax (AMT); revives many now-expired tax extenders, including the research tax credit and the American Opportunity Tax Credit; and provides for a maximum estate tax of 40 percent with a $5 million exclusion.  In addition to an extension for most taxpayers of the lower individual income and capital gains tax rates, marriage penalty relief, and more than 50 other tax benefits popularly referred to as the "Bush Tax Cuts," the legislation makes over 100 changes to the Internal Revenue Code.

Highlights of The American Taxpayer Relief Act of 2012 include:

According to Commerce Clearing House (CCH, a Wolters Kluwer business)

The next battle will be over the debt ceiling: Lawmakers will have to turn to discussing how to deal with the nation's $16.4 trillion debt ceiling next, which will need to be raised as early as mid-February to prevent a default.  And, according to House Speaker John Boehner, R-Ohio,"Without meaningful reform of entitlements, real spending controls, and a fairer, cleaner tax code, our debt will continue to grow, and our economy will continue to stumble."

What is your thoughts on deficit reduction and tax simplification?

Tags: American Taxpayer Relief Act
Category: Accounting

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