Fiscal Cliff Update

On January 1, 2013, Congress passed a law for President Obama to consider which will hold income tax rates steady for most taxpayers. High-income earners (those who are single making more than $400,000 and those married, filing jointly making more than $450,000) will see a significant increase in taxes in addition to those already set to go into effect from the health care legislation.

However, the social security tax reduction that was in place for 2011 and 2012 has expired. Therefore, most taxpayers will see an additional 2% withheld from their paycheck. It also affects self-employed taxpayers.