Fiscal Cliff Deal Passes Congress

It took until January 1, but both the House and Senate finally approved and sent to the President a fiscal cliff agreement that extends the Bush-era tax cuts beyond 2012 for the vast majority of taxpayers. Tax rates will not change for individuals with taxable income up to $400,000 and joint filers up to $450,000. Permanent alternative minimum tax (AMT) relief is provided. The legislation retroactively extends tax breaks that expired at the end of 2011 or at the end of 2012. Favorable estate tax exemption rules also are extended.

However, employees and self-employed workers will pay higher Social Security taxes after 2012 because the 2% payroll tax cut was not extended.

We’ll be providing new law details in the days ahead. Stay tuned.