In Case You Missed The News, Your Taxes Are Going Up

In Case You Missed The News, Your Taxes Are Going Up

With the close of 2012 rapidly approaching so are the sunset dates on more than a few tax programs. Payroll tax, estate tax, alternative minimum tax as well as some Bush era tax programs are all set to expire December 31. In addition to the programs that are expiring there will also be new Affordable Care Taxes added. Why does this happen and what does this all mean and how much more is coming out of your pocket?

Well, first the why.  Quite often tax programs are put in place on a temporary basis.  Seems logical enough.  A try it before you buy it approach.  Test out the far reaching economic effects of a tax program and see if it works out.  Except it is rarely a genuine reason like that.  Tax programs are temporary because 1. often that is the only way for one party to get the other party in a bipartisan legislature to agree; and 2. if there is an expiration date the business owners and constituents have to go back to the legislators and “discuss” or plead their case.  If they have to go back and get an audience they need access.  To get access they donate.  When you have a term that expires your need money for re-election and so the cycle of tax programs goes.

How much more will come out of your pocket is a much murkier question, but one that a good tax planner can give you a reasonably close answer to.  It is also a question you need to get a grip on to help with budgeting for the coming year.  If your cost per employee is going to rise you need to take that into consideration when giving raises, expanding your work force, or considering other human resource matters.

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