New Taxes Coming for a New Year

Each year, the tax laws change.  New taxes are levied, and some taxes are cut.

For 2013, you are likely to see some new taxes as old tax cuts expire and as new taxes are imposed.  The new year is likely to bring with it new impacts on your budget.

While there is no saying, for sure, what will happen (what with budget talks underway, and negotiations attempting to avoid the fiscal cliff), here’s what’s possible so far:

New Taxes You Can and Will See Next Year

Payroll Taxes Going Up

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Are You Ready to Fall Off the Fiscal Cliff? What You Need to Know if the Bush Tax Cuts Expire

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The times they are a changin’ for taxes in the United States if legislation doesn’t change things soon.  Most americans are unaware of their taxes will be reshaped by the impending “fiscal cliff.”

The phrase that is being tossed around in the media is “falling off the fiscal cliff” or “taxmageddon”, and both are fairly accurate as to the repercussions.

Understanding exactly what is going to happen if we fall of the fiscal cliff is critical to your personal finances for 2013, so we’re going to break down some of the big points for you.

Repercussions of Falling Off the Fiscal Cliff

This list is pretty terrifying unless you enjoy paying higher taxes.

Expiration of Payroll Tax Cut

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How the IRS Decides Whether You Have a Business or a Hobby

As the end of the year approaches, and tax season rears its head, it’s important to start figuring out what deductions and credits you are eligible for.

Many consumers are excited to learn that they can take deductions for hobbies as well as for businesses.

However, what is allowed when it comes to these tax deductions depends a great deal on whether the IRS thinks you have a legitimate business, or whether what you are doing is really a hobby.

Tax Deductions: Business vs. Hobby

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Is the Curtain Finally Coming Down on the Payroll Tax Cut?

In what seems like an annual rite in Washington, DC, the extension of the social security payroll tax cut—a.k.a., the “payroll tax cut”—is once again up for debate.

The cut was first implemented in 2010 under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  It provided for a 2% reduction in the employee portion of the social security payroll tax, from 6.2% to 4.2%.

The cut was set to expire at the end of 2011, but was extended to the end of February, 2012, and then ultimately through the end of the year.

But this year it’s looking like an another extension of the cut may not happen.

No political consensus to extend the payroll tax cut

With the presidential election and the prospect of a lame duck Congress looming there is little debate on the Payroll Tax Cut extension.  Concern is also centering on the still large federal budget deficits which will be partially reduced through the expiration of the payroll tax cut.  If anyone has serious intentions of extending the cut they’re laying low right now.

Very low.

If things stay as they are on January 1st, 2013 the Payroll Tax Cut will expire.

Why the payroll tax cut is a true middle class tax cut

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What is Social Security Tax?

When you get your first paycheck from a new job you might be surprised to see how many different deductions reduced your earnings.

You’ll see deductions for Federal income tax, state income tax if your state charges it, and a whole host of acronyms of other taxes.

One of those taxes is social security tax.

We’ve all heard of it, but what exactly is Social Security tax?

What is Social Security Tax?

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Should I Use the Home Office Tax Deduction for My Home Business?

Everyone that wants to be audited, please raise your hand.

No one?

Simply mention the phrase “home office tax deduction” and most people instantly think of an audit.

To say there is quite the stigma surrounding taking a home office tax deduction would be an understatement.  On one hand, many individuals assume if they claim deductions for using part of their home for business purposes that they will automatically incur the wrath of an IRS audit.  On the other hand, being able to write off a bunch of legitimate costs is extremely tempting and could save business owners and their employees a lot of money at tax time.

So should you use the tax deduction from running your business out of your home?  What can you claim and what are the risks?

How to Stop Fearing the Home Office Tax Deduction

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What is the Buffett Rule Tax Plan and Why Are We Hearing So Much About It?

Warren Buffett has publicly stated many times that he thinks the richest individuals in the United States don’t pay enough in income tax.

He consistently gives the example that he pays a smaller percentage of his overall income in tax than his secretary does.

He’s been so adamant that the Obama administration picked up the baton and ran with it, dubbing a new proposal the “Buffett Tax Rule”.

What is the Buffett Tax Rule?

So what exactly is the Buffet tax rule?

The administration’s proposal would set a floor of a 30% income tax on those with incomes over $1,000,000 in a given year.  The goal is that no middle income taxpayer would pay a larger share of his or her income than someone making millions of dollars.

Why is the Buffett Rule So Popular Right Now?

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