Fiscal Cliff + Tax Advice?

[Ashton]

With this looming fiscal cliff I'm wondering if anyone knows how it will affect taxes on commissions and such? Currently I pay right around 33-34% on them and as that accounts for over 50% of my income this is going to suck if it goes up. Does anyone know how much taxes might go up on something like this? or will taxes not change on something like this?

[hatidua]

Tax questions, -ask your accountant.
Gun questions, -ask here.

[Ashton]

Tax questions, -ask your accountant.
Gun questions, -ask here.

I don't have an accountant. I just use turbotax.

This is "General Discussion"

[MrPrena]

With this looming fiscal cliff I'm wondering if anyone knows how it will affect taxes on commissions and such? Currently I pay right around 33-34% on them and as that accounts for over 50% of my income this is going to suck if it goes up. Does anyone know how much taxes might go up on something like this? or will taxes not change on something like this?

It really is upto your tax bracket. It would be safe to "assume" it will be near to worse than pre-WBush tax cut tax rate.
I would probably use 1999-2001 income tax rate to use that as a bench mark +/- .

[sniper7]

I'm pretty sure they will be going up. as far as I know it is parted as income.

[Kraven251]

Everything I have seen is that you are going to get hit with minimum additional 5% taxes and upto additional 15% if you are making over 100k. Pretty much gutting the middle class, this is if Congress lets it all lapse. The country will be pretty fucked, Happy New Year.


I'll try to track down the source on this that was published.

[Ashton]

Everything I have seen is that you are going to get hit with minimum additional 5% taxes and upto additional 15% if you are making over 100k. Pretty much gutting the middle class, this is if Congress lets it all lapse. The country will be pretty fucked, Happy New Year.

Well that fucking sucks,another 20% of taxes. They better fix this shit now.

[KestrelBike]

Everything I have seen is that you are going to get hit with minimum additional 5% taxes and upto additional 15% if you are making over 100k. Pretty much gutting the middle class, this is if Congress lets it all lapse. The country will be pretty fucked, Happy New Year.

Seriously, I'd almost be tempted to laugh if it wasn't so disastrous and so avoidable if Washington weren't such a bag of a-holes. That damned a-hole obama thinks he can keep up such reckless spending, and then he even *contemplates* the possibility of imposing such taxes across the most vulnerable lower-middle income tax brackets who are the only people keeping consumer spending limping along. Borderline treasonous. This is honestly Econ 101, and it's beyond an "oops" and looking more like a purposeful kamikaze of the economy.

[th3w01f]

Spoke with our accountant on Christmas and he said not to worry, only an extra 10 - 15% pre-tax over what we're paying now. [panic]

[Kraven251]

I found this little tidbit too...

Source (http://www.washingtonpost.com/politics/us-will-hit-debt-limit-on-dec-31-treasury-department-says/2012/12/26/0e8e3738-4fa2-11e2-839d-d54cc6e49b63_story.html)

Then, after Monday, Treasury can tap a range of federal funds that benefit government employees — most critically, the money-market fund in which many federal employees invest as part of their thrift savings plans. These efforts could create $185 billion in borrowing space.

Federal employees would be unaffected, as long as Congress ultimately raises the debt limit by the final deadline."



So...I might not be understanding this properly but isn't this similar to banks and investment firms borrowing against money that isn't theirs with the intent of paying it back once they are done with it. I vaguely remember a problem with this.
Not to mention, it worked so well for Social Security.

[jreifsch80]

im curious now too since about 50% of my pay is commision, i'll ask my mom, shes a CPA and a controller of a company.

[brutal]

Can't say on income tax rates, but payroll taxes are affected.

Here's the e-mail we got from HR. The vast majority of employees are base+revenuce based.

Good morning -

On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (H.R. 8), preventing the U.S. from going over the impending “fiscal cliff.” The Act, which President Obama signed into law, extended certain tax relief measures for most Americans.

The Act does not, however, avoid the expiration of the payroll tax cuts that were in effect for 2011 and 2012. These tax cuts temporarily reduced the amount of Social Security ("FICA") taxes owed by employees by two percentage points from 6.2% to 4.2%. This reduction expired on December 31, 2012. Therefore, effective January 1, 2013, employees will have the full 6.2% for FICA withheld from their paychecks.

The New Year brings two additional payroll tax increases:



First, maximum taxable earnings for Social Security contributions increase from $110,100 to $113,700 for 2013, which means that higher earners will pay additional Social Security contributions.
Second, the new Additional Medicare Tax (imposed by the Patient Protection and Affordable Care Act) requires individuals to pay a supplemental 0.9% tax (in addition to the 1.45% contribution that applies to all wages) on wages in excess of $200,000.


Should you have any questions regarding these tax changes and how they may affect your paycheck, please do not hesitate to call REDACTED

Best regards,
Your Human Resources Team