Tax breaks going away
POSTED: Tuesday, December 18, 2012 - 11:15pm
UPDATED: Wednesday, December 19, 2012 - 11:21am
While we’re all finishing Christmas shopping and preparing for New Year’s, there are other important issues to be handled in the next few weeks.
And it’s something we don’t want to think about.
Yes, the word we’re all avoiding is taxes.
Soon you’re W-2 form will arrive with a January check, and the yearly chore begins.
It’s the annual ritual, sorting through the government forms, going online for instructions and dragging out the file folders with receipts.
But you should know some things have changed this year, and from the taxpayer’s point of view, the changes aren’t good.
Particularly if there’s no solution to the fiscal cliff.
“the tax rates, if Congress does not act, will be 15, 28, 31, 36, and 39.6,” SAYS Maureen Parkhill of Liberty Tax Service.
“The adoption credit to adopt a child is gone completely at the end of this year,” SHE TOLD ketk. “Dividends, that tax rate could go up to as much as 39.6%. the American Opportunity Credit for education, you could receive up to $2000 for the first four years of college. That’s going away. The repeal of the student loan interest. You’ll no longer be able to deduct student loan interest. The child tax credit is going down to $500 from $1000. If you are eligible for the earned income credit, you’ve been able to count 3 children or more. That’s going back down to two. That will make a significant impact on a lot of our population. And your dependent and child care credit is going down.”
So what is the one thing we need to think about to prepare for 2013?
“if they do not come to terms by December 31st,” Parkhill says, “people need to be thinking about redoing their W4’s, because their tax rates are going to go up.”