Transcript for Navigating The Fiscal Cliff At Tax Time 2012
Even if you've been living under a rock you probably heard about the fiscal cliff but while lawmakers in Washington and battle it out for our nation's future. What can you do to protect your hard... See More
Even if you've been living under a rock you probably heard about the fiscal cliff but while lawmakers in Washington and battle it out for our nation's future. What can you do to protect your hard earned money here with some advice as Jackson -- chief tax officer. Mark steamer welcome back Martin to see you to be here so there's a lot of uncertainty right now obviously makes -- -- very hard year to prepare for your taxes when you don't know what your tax rates going to meet. It's a hard year in and year this year more so with this perfect storm of late legislation. Complex legislation and still uncertainty here at these final days that's a very very difficult year plan indeed it what would you advise people to -- to they have a plan a plan -- implants may well certainly this is the you to be engaged early and understand it don't take the attitude that it really doesn't affect me this is a rich -- issue -- he -- see a lot of that -- The reality is the fiscal cliff affects that the high income -- to be sure. But the middle and low income earners even as much so especially if there's a delay in tax filing season or some of these breaks don't make it back into the tax code. The lower income people will be disproportionately. Highly effective -- these lost benefit absolutely so at this do we know are there any tax changes that will absolutely -- Well great question and the reality is the tax changes have already occurred. The extender tax benefits about a dozen tax benefits from tuition and fee deduction to teachers out of pocket expenses to. Sales and these tax being deducted on the schedule a those are all gone for -- twelve they expired December 31 2011. So this whole fiscal cliff issue -- being discussed is to put those breaks back in same with Alternative Minimum Tax about twenty million people pay that. The way the law has right now for 2012 I've seen as high as sixty million people will -- empty your Alternative Minimum Tax so the pact is to. Put back in some of the breaks that makes that a lesser burden so. The tax law changes have happened we -- economy come on. -- -- writes absolutely know what the IRS -- we talk about ourselves as taxpayers and how we're affected. Will be IR SC a processing delay as they absorb all the changes the -- -- And uniquely difficult position and they're not like private companies that we can start programming our software on the scenario -- that scenario they bylaw have to program to the tax law and as I just said that acts are right now. AMT's gonna touch a lot of people extender provisions are gone. They are making some progressive you know changes this year because it has gotten so late in -- taking -- -- you know advantage that they can. But the reality is every day that we don't have a final agreed to in tax legislation. They have to wait even just check their systems right so you can find yourself in -- situation -- If it doesn't get done this week but perhaps next week or goodness forbid after the first of the year yes the IRS we'll have to take some time to check all their systems. That'll mean delays still a lot of those folks who file early and it's about sixty million -- with an asking does that change -- advice which is usually to file early. Well he should always file early but Farley's honestly earlier -- you can and it's as early as you can the reason -- he's just good advice if you're due a refund like 75% of the country your hundred million people. You get your money early. If you owed you still have to pay -- April 15 but the real reason to file early Tonya is because ID theft and refund fraud is becoming rampant in the country. And if you file early you effectively locked out the bad guys from taking your Social Security number and messing with your refund the filing early as early as you can always good advice to -- Campbell what are the top few think the taxpayers continue to hold -- as much of -- money as possible -- certainly do look for last year's tax return and see where that was more importantly reflect on -- year for life changes to something changing your life. That might lend itself to new tax benefit and and more so than getting married or having a dependent child. Did you have a life changing get laid off for a while and look for job and have. Deductible job search expenses did you start a new business and you have a whole new suite of deductions you might take advantage of did you -- a family member or dependent. Start back to school -- had education credits. That -- dependent parents start to be cared for by you and your family and you have a new dependent that's not really -- -- the standard type independent so look to -- year for life changes and then talked to a tax pro and see what that might mean in no way of a bigger refund. Regardless of how the tax changes ultimately come out there are certainly things that will go on your tax return if you know to look for them. Rated -- now a lot of companies are issuing dividends early this year for -- of the tax increases that that may come up. Any advice on what that taxpayers should do without money well you know always spend it wisely and pay down -- and learn but I think that's. Perfect indication of why some people think the tax Richard going up next year and that's a pretty safe bet so companies are moving those dividends and -- this year. But I'll tell people to do some soul searching and see what they think is really going to be the tax law. You know scenario for both this year not much you can do -- -- did to this point celery some deductions -- some income. But really look out for -- thirteen in -- fourteen I think you're going see substantive tax reform and tax simplification so. Evaluate your situation again in come taxes a big event for each taxpayer. Try to see what you think's gonna happen next few years. Start early with that analysis no reason to wait till next summer as you you don't get to make that part of this year's New Year's resolution to get a plan to -- -- tax burden. Get the biggest refund you can let's get help get help. If that's get organized get organized if -- start to learn new technologies to be able to manage some of those records and documents learn some new technologies it will put more money in your pocket. -- -- -- thank you so much for bring some clarity and uncertain situation thank you thank you Don.
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