What does the fiscal cliff deal mean for us? - 14 News, WFIE, Evansville, Henderson, Owensboro

What does the fiscal cliff deal mean for us?

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By now you've heard Congress reached deal on the fiscal cliff. In fact, a deal was sent to the White House late Wednesday afternoon for the president's signature.

Question now, what does it mean for you and me? 

 

At the center of the 157 page bill adopted by Congress Tuesday night are tax hikes on the wealthiest of households, but everyday people like yourselves, are going to see a little spike as well. 

"They also will be impacted by the payroll tax cut," said Teri Hollander Albin with Hilliard and Lyons.
 
Your payroll tax is the money that is automatically taken out of your paycheck. 

"That will cost a $50,000 household about a $100 per month, so about a $1,000 per year," Hollander said.

So, if you get a weekly paycheck that would break down to about $20-$25 out of your paycheck each week.

If you make less, say $25,000 a year, about $500 per year will come out of your paycheck. It caps at an income of $113,000, those families will lose about $2,000 annually.

There is good news for families who invest in stocks. 

"A big concern was what was going to happen to investment taxes. There was a lot of talk that taxes on dividends would increase to 20 percent," Hollander said.

Those rates did not increase which means that you will only pay 15 percent on your capital gains.

"Which is good for investors. That's a source of income especially with rates being low right now," Hollander said.

With the fiscal cliff now averted, Congress will now turn its attention to the debt ceiling which they will address in a couple of months.

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