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Showing posts with the label White House Fiscal Cliff

Small Business Impact of the Fiscal Cliff Deal

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In an effort to get the word out, yesterday the White House sponsored a conference call with small business owners to describe the "Fiscal Cliff" bill, signed into law by President Obama on January 3rd in a successful effort to avoid a government shutdown. (For a detailed, highly technical summary of the new law, see: http://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf)

The law extends the Bush tax cuts for those making less than $250,000. It keeps the earned income tax credit, tax credits for child care, and something called the American Opportunity Tax Credit: college tuition tax breaks. The law also fixes a problem with the Alternative Minimum Tax (AMT), in the sense that those in the middle class will not be faced with a $2,500 increase in taxes due to the AMT.

The White House called this a balanced approach, meaning that upper income persons will face higher taxes. The law reinstates a 39.6% tax rate on those with income over $450,000 (couples)/$400,000 (sin…