The Tax Man Cometh! But Don't Pay a Penny More Than You Have to This Year

With the Congressional "super committee" failing to come to an agreement on a deficit reduction plan before the November 23rd deadline, the next priority before the end of 2011 has involved extending key tax breaks for 2012. The "Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010" enacted payroll tax cuts for millions of Americans, reducing the amount they pay 2% from 6.2% to 4.2% in an effort to stimulate the economy. The Act also reinstated the Emergency Unemployment Compensation program, which extends unemployment insurance benefits for up to 13 months, along with the Child Tax Credit, the Earned Income Tax Credit and Renewable Energy Grants.

Some of these important benefits could expire by the end of the year if they are not extended again by Congress. Extending the payroll tax cut and emergency unemployment insurance through 2012 would help consumers put more money in their pockets. However, these benefits are also estimated to cost the government $200 billion dollars, increasing the deficit when Congress is supposed to be focused on trimming $1.2 trillion dollars instead.

The good news for many taxpayers is that broad tax reform, and subsequent tax increases, is not likely until at least 2013. Tune in to this week's CBTV show to learn how you can prevent yourself from overpaying on your taxes for 2011 and find out more about what you can expect for 2012!

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