Friday, November 30, 2012
The Tax Policy Center has created a new Tax Calculator that lets users examine the effects of four potential outcomes of negotiations over the upcoming fiscal cliff:
- 2012 tax law (with an AMT patch). This is what you’re paying this year, assuming Congress gets around to patching the alternative minimum tax for 2012.
- 2013 tax law. This is what you’ll pay if Congress doesn’t act and we go over the fiscal cliff for all of next year.
- The Senate Democratic plan, which would extend the expiring Bush-era income tax cuts for a year for all except the top 2 percent of taxpayers and extend the credits originally enacted by President Obama in 2009, but allow the temporary payroll tax cut to expire.
The Senate Republican plan,
which would extend the Bush-era income tax cuts for everyone, but would
allow the 2009 credits and the temporary payroll tax cut to expire.
(More details on these scenarios, including their treatment of the AMT and estate taxes, are available here.)
The calculator does not include options to cap or eliminate itemized deductions but you can see the effects of such options simply by reducing or zeroing out the input values for some or all deductions. And, as in earlier versions of the calculator, you can look at ready-made examples or create your own case.