The minutes are ticking by and the Fiscal Cliff is becoming seemingly steeper and steeper by the second… reports of milk prices soaring to $7+ per gallon by February, loss of earned income tax credit, a 2% rise in payroll taxes and worse. . . Confused yet? Here are the ins & outs of the Fiscal cliff, how it is likely to affect your family, as well as what you can do about it! . . .
Plunging Head First over the Cliff- Worst Case Scenario:
First of all, let’s get the worst case scenario out of the way- Let’s, for a moment, assume that Congress fails to get its act together and we all plunge headfirst over the cliff- if that occurs, the Fiscal Cliff effect remains for the next full year. Here are the expected ramifications:
- If your annual income is $20,000-$30,000- your taxes will increase $1,064 (avg increase)
- If your annual income is $40,000-$50,000- your taxes will increase $1,729 (avg increase)
- If your annual income of $50,000 to $75,000- your taxes will increase (avg increase)
- Child Tax Credit
- Qualified Mortgage Insurance Premiums
- State/Local Sales Taxes
- Energy Credits
- Medical Expense Deductions
- WIC (Women Infant & Children Supplemental Program) loses approximately $543 Million
- CDC (Centers for Disease Control & Prevention) takes a $464 Million cut
Now that we have a basic rundown of what this Fiscal Cliff means to our families, here are a few things that would still be available/ unchanged:
5 Ways to Make it off the Cliff Safely:
Quite frankly, we really have no choice whether or not we go over the cliff, all we can do is prepare ourselves and our families for the increasing expenses . . . so with that in mind, RELAX- getting freaked out or stressed over something that you cannot change is not going to help you or your family.
- Consolidating services, canceling those you don’t actually need (such as satellite movie or sports packages)
- Reducing your grocery & household expenses- make your own convenience foods
- finding alternative family entertainment/fun& crafts – dump the gym membershipand work out at home
As the first of the year gets closer and the fiscal cliff remains unresolved, what are your thoughts and main concerns?
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