The Fiscal Cliff Deal And Your Taxes

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Short Answer: Your Taxes Will Go Up

 

The new deal to avoid the fiscal cliff means the average Alabamian will pay an additional $579 dollars a year in taxes, but some will pay much more. The tax package passed by Congress yesterday prevents one set of tax increases from hitting most Americans, but it won’t stop them all. A temporary Social Security payroll tax reduction will expire, meaning nearly every wage earner will see taxes go up. The wealthy also face higher income taxes.

The median household income in Alabama is just under $43,000. How the tax increases will affect households at different income levels:

 

Annual income: $20,000 to $30,000

Average tax increase: $297

 

Annual income: $30,000 to $40,000

Average tax increase: $445

 

Annual income: $40,000 to $50,000

Average tax increase: $579

 

Annual income: $50,000 to $75,000

Average tax increase: $822

 

Annual income: $75,000 to $100,000

Average tax increase: $1,206

 

Annual income: $100,000 to $200,000

Average tax increase: $1,784

 

Annual income: $200,000 to $500,000

Average tax increase: $2,711

 

Annual income: $500,000 to $1 million

Average tax increase: $14,812

 

Annual income: More than $1 million

Average tax increase: $170,341

 

 

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