Fiscal Cliff & “Taxmageddon” Approach with Expiring Tax Credits

There are more than 30 different tax breaks set to expire at the end of 2012. Nearly everyone will be effected if the credits are not renewed. If the credits are not renewed everyone will pay more income taxes, and workers will bring home a little less money in each paycheck. Groups that will be hit particularly hard by Taxmageddon include middle-class families, students, and retirees.

“Taxmageddon” refers to a disaster for taxpayers on January 1, 2013, if the former set of tax breaks are allowed to expire. The Taxmageddon tax break reversal will bring in approximately $494 billion to the government in tax revenue.

The following tax breaks are all set to expire at the end of 2012:

• Bush Sr. era tax cuts of 2001 and 2003
• Tax Relief Act of 2010
• Mortgage Forgiveness Debt Relief Act
• Payroll tax cut
• Alternative Minimum Tax patch
• The large group of tax breaks called “extenders” (because they must be renewed every year)