By: Paul Himmelstein If you are unable to tune out the blaring cacophony of 24-hour news stations screaming for your attention, then you have certainly heard about the impending ‘Fiscal Cliff’. Without fully understanding all of the complexities, the name itself conjures up images of Wily E. Coyote and Thelma and Louise and you know it isn’t a good thing. But what exactly is this ‘cliff’ our nation is heading towards and how does it affect you? Simply put, there are a number of taxes (income, dividend, capital gains, estate and gift) that are set to automatically increase at the end of this year that will significantly raise taxes for most individuals. This increase in taxes, combined with some automatic spending cuts, will reduce the Federal deficit by approximately $500 Billion. That is the Fiscal Cliff. Similar austerity programs have been enacted through Europe, most dramatically in Greece, with strong recessionary results. The difference is that our program does not take government action to be implemented. Rather, legislative inaction will lead to our tax increases. Will Congress kick the proverbial can down the road and, if so, how far? How will this uncertainty affect the stock market, the job market or your business? How will the tax increases affect you and your business? Should you accelerate income into the 2012 tax year? Your trusted Van Osdol & Magruder attorney is ready to discuss these questions and more with you.
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