President Obama and Congress have yet to reach an agreement regarding the Fiscal Cliff. Many areas of the economy will be affected if we go over the Fiscal Cliff, one of them being a loss or lessening in certain tax breaks. Four of the tax breaks that will negatively affect parents’ financial state are the Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit. Some families are at risk of losing money on more than one of the tax breaks, which will result in either the loss of thousands or owing thousands.
See below for the way each tax break will be affected if the country goes over the Fiscal Cliff:
1. The Child Tax Credit allows lower income families to claim up to $1,000 per every child under the age of 17. If the Bush and Obama tax cuts expire, the tax break will drop back to $500 and only extend to working families with three or more children. A family with only one or two children could end up paying $1,000.
2. The Child and Dependent Care Tax Credit allows working parents to claim up to $3,000 worth of expenses per child on up to two children. The parents could receive a maximum of 35 percent of this amount as a credit. If the Bush tax cuts expire, parents can claim up to $2,400 per child and receive a maximum of 30 percent as a credit.
3. The Bush and Obama administrations formulated the Earned Income Tax Credit, which allows married couples with a joint income below $50,270 and three or more children to receive up to $5,891. Obama also raised the maximum credit from 40 percent to 45 percent of earned income for families with three or more children. If the country goes over the Fiscal Cliff, the rate will fall back to 40 percent and the credit allotted by Bush’s Earned Income Tax Credit will drop approximately $5,000.
4. The American Opportunity Tax Credit was a part of Obama’s 2009 stimulus plan. The plan allows low-income families to claim up to $2,500 of credit for four years to help them pay for college fees. At the end of the year, Obama’s American Opportunity Tax Credit will expire and revert back to the Hope Credit, where the maximum credit will drop to $1,800 for only two years.
To read more on this story visit: http://money.cnn.com/2012/12/18/pf/taxes/parents-tax-breaks/index.html
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.
Tag: Tax Cuts
Little Progress in ‘Fiscal Cliff’ Negotiations
President Obama and the House Republicans are still in negotiations when it comes to reaching a deal in regards to the dreaded ‘fiscal cliff.’ If existing laws are not changed by the end of 2012 the economic effects of the fiscal cliff could result in tax increases, spending cuts and a corresponding reduction in the US budget deficit beginning in 2013. President Obama announced that he is determined to let the Bush-era tax cuts for the upper class expire. This past Sunday, President Obama and House Speaker John Boehner met at the White House to attempt a negotiation. Representatives from both parties stated, “The lines of communication remain open” after the meeting.
Some Republicans seem to be on board with the President’s plan for higher taxes for the upper class. Tennessee Senator Bob Corker stated that he is “beginning to believe this is the best route for us to take.” However, there is still a large group of Republicans who believe the most efficient route would be to close special interest loopholes. Either way, the White House and the House of Representatives do not have long, the fiscal cliff will hit in less than three weeks.
To read more on this story visit: http://www.cbsnews.com/8301-250_162-57558124/as-fiscal-cliff-clock-ticks-obama-hits-the-road-again/
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.
How the ‘Fiscal Cliff’ will Affect Taxes and Federal Spending
A compromise is yet to be made between President Obama and Congress regarding the dreaded ‘fiscal cliff.’ The term fiscal cliff is used to describe the state of the government at the end of the year when the tax cuts enacted by the Bush administration expire. Without action by Congress, America will soon face the following:
• A rollback of the “income triggers” for alternative minimum tax (AMT) to their 2000 levels. Without the patch, between 30 and 31 million taxpayers would be paying AMT.
• An increase in maximum capital gains taxes to 20% from their current 15%. Dividends, now taxed at a maximum of 15%, would be taxed at ordinary income rates.
• Federal spending on discretionary and defense uses would be cut by $110 billion per year.
• The 2 percent payroll tax cuts would expire.
Co-Director of the national tax department and Ernst & Young, Eric Solomon said 2012 tax refunds would likely be delayed if America enters into the fiscal cliff. President Obama has proposed higher taxes on upper-income taxpayers, which a predominantly Republican House does not agree with. Many suspect a compromise might not be made until the eleventh hour.
To read more on this story visit: http://www.usatoday.com/story/money/personalfinance/2012/11/07/how-taxes-will-change/1688699/
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.
“Taxmaggedon” Expected to Throw the U.S. Back into a Recession
At the end of the year, the Bush Administration’s tax cuts are set to expire. The Obama Administration’s payroll tax cuts are also set to expire along with cuts for several federal agencies, such as the Pentagon. All of these changes are expected to send the economy into another recession beginning in early 2013. If no changes are made to the expiring cuts, the economy will take an estimated $607 billion hit.
As of now, the Republicans and the President are not in agreement on how to avoid the recession. President Obama has made it clear he will veto any attempt at continuing Bush’s tax cuts, which is precisely what the Republicans want to happen. President Obama has threatened to veto any effort to amend current policies unless Republicans agree to let the Bush tax cuts expire for households earning more than $250,000 a year.
To read more on this story visit: http://www.washingtonpost.com/business/economy/cbo-taxmageddon-would-throw-us-back-into-recession/2012/05/22/gIQAblvliU_story.html
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.