Taxes

Don't let the fiscal cliff throw you a tax-prep curveball

Jan. 24, 2013 at 1:50 PM ET

Among the storm and thunder during the fiscal cliff wrangling was hand-wringing over how it might mess up all our taxes this year. People were worried that revised tax forms wouldn't get out in time and that the IRS might not even be able to collect taxes this year!

But in the final result, the biggest impact for regular Americans was the expiration of the Payroll Tax and if they were early filers, they would have to wait an extra week.

Personal finance advice expert Hitha Prabhakar joined us in a live online chat to help readers sort through the fiscal cliff aftermath, get their ducks in a row for tax prep time, and take a deep breath of relief.

TODAY: One of the many fiscal cliff fallouts was anxiety over what it would mean for tax time. Hitha, what's the biggest takeaway from that whole mess taxpayers should be thinking about as they get their forms together?

PRABHAKAR: I think the biggest take away regarding Fiscal Cliff with regard to 2013 taxes are two issues- the Payroll Tax and the Alternative Minimum Tax. Let's talk about the Payroll Tax first. Basically during the Fiscal Cliff negotiations, Congress decided NOT to renew a temporary payroll tax reduction. What that means for you is your paychecks are going to get a little smaller and will probably cost you close to $1,000 over the year.


TOP