by Brandi Savitt – December 30, 2010
The Key Provisions & How They Affect You
With all of the media uproar over Obama’s big compromise with Republicans to extend the Bush tax cuts, most of the talk has been of politics, rather than explaining how it will actually affect our daily lives. Sure, you might be more concerned with your plans for New Year’s Eve than tax plans right now, but come on - you should know a little something about how your money is going to be affected long after the last cork has popped…
So, here are the key provisions of the deal- Fab & Fru style- of how YOUR tax structure and benefits will play out over 2011 & 2012!
No Increased Taxes for Anyone!
Sounds good right? Well… that depends on your point of view. This is actually seen as the main point where Obama ‘caved in’ to the Republican Party. Why? Because raising taxes for wealthy individuals and families who make over $250,000 a year (in effort to help reduce our national deficit), was a key campaign promise of Obama’s. Which is why many of his core supporters are up in arms at his decision to extend the Bush Tax Cuts – for everyone, including the wealthy – two more years.
Basically, Democrats wanted to see the tax cuts extended only for lower and middle income earners, while Republicans wanted them extended for everybody. Rather than risk losing the extension for the majority of people- along with other key provisions that the Democrats proposed to Congress- Obama compromised and extended the tax cuts across the board.
Current Tax Bracket Structure!
Unemployment Benefits Extended by 13 Months!
Washington has extended emergency unemployment benefits an additional 13 months. According to UnemployedWorkers.org, “millions of unemployed workers and their families will have the basic security of knowing these benefits are available for between 34 and 73 weeks if needed – beyond the 26 weeks of regular state-funded unemployment insurance.”
One Year Reduction In Social Security Payroll Tax!
Businesses have until Jan. 31, 2011 to implement the payroll tax cut “holiday” that reduces Social Security tax for employees from 6.25% to 4.25%. The payroll tax cut affects every employee and is effective on the first $106,800 in wages—providing employees with savings of up to $2,136 for 2011, according to the IRS.| Print
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