Tax Tip: What Has Changed Since the Fiscal Cliff?
(NEW YORK) — At the end of last year there was a huge debate over government spending and taxes. But when the smoke cleared, today’s complex system was left largely unchanged.
“It did extend some tax breaks that expired at the end of 2011 but for most people 2012 is basically unchanged and that’s true even for the more affluent tax payers,” says Bob Meighan with the tax prep firm TurboTax.
For most people the big change came at the start of the 2013 tax season.
“For the last couple of years there’s been a two percent point reduction on the social security tax that folks paid on their wages or that self employed people pay,” says Eric Smith with the Internal Revenue Service.
But Smith adds that special break went away on Jan. 1, meaning most people are paying more taxes this year.
“The rate that you pay returns to 6.2 percent on social security tax plus 1.45 percent for most people on Medicare,” he notes.
Most people are paying that amount now.
Copyright 2013 ABC News Radio