Now that Congress has extended the president’s requested Payroll Tax Holiday, America may want to spend it while they got it. Without significant tax code changes, in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.
Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.
That hike will cost the majority of filers an additional $435.
For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.