Expiring Bush Tax Cuts Will Hurt the Middle Class when they expire at the end of 2012. The return of the marriage penalty is only one of the below the belt hits solid Americans are going to get. There are still things that can be done to cut your taxes, but you are going to have to start thinking outside the box, or at least “above the line.” Get ten tax tips to get you started.
Expiring Bush Tax Cuts and the loss of the Marriage Deductions
With the loss of the marriage deductions in the expiring bush tax cuts, married couples are going to start paying more than their single counterparts that make the same amount of money. The Bush Tax Cuts equalized the tax bracket spread for singles and couples. It isn’t right that families are being penalized by the IRS. There seems to be a war on the middle class standard American family.
Learning to control their taxes may be the only way these families survive. Your tax advisor has probably never talked to you about “above the line accounting” and “below the line accounting.” You now need to know the secret tax tips that the rich Americans have learned and used to get them to where they are today.
Expiring Bush Tax Cuts and the Change of the Adjusted Gross Income
With the expiring bush tax cuts, it all has to do with adjusted gross income (AGI). AGI is the magic number that controls your tax bracket. It also controls whether or not you pay AMT (alternative minimum tax). When the Bush Tax Cuts expire, there will be a lot more middle income Americans that will be hit by the AMT.
You have to work above the line to affect your AGI. The “line” is the last line of page one on you 1040 form. The standard deductions that most tax advisors concentrate on are “below the line” and they don’t affect your AGI. Many of the “tax tips” LegaLees has prepared are “above the line” ideas.
The neat thing is, if you can lower your AGI, you can maybe get into a lower tax bracket and save taxes on every dime you make. That’s why it’s so important to start thinking above the line.
With the expiring bush tax cuts and the other Obamacare and debt ceiling taxes set to kick in, everybody is going to be scrambling for every tax tip and loophole they can find. In fact, your ability to take advantage of the tax loopholes may mean the difference between survival and economic disaster.