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The Fiscal Cliff

The Fiscal Cliff. Name and company. The Fiscal Cliff. About the PICPA. PICPA – Pennsylvania Institute of Certified Public Accountants The PICPA is a professional association of more than 20,000 members working together to improve the profession and serve the public interest.

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The Fiscal Cliff

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  1. The Fiscal Cliff • Name and company

  2. The Fiscal Cliff About the PICPA • PICPA – Pennsylvania Institute of Certified Public Accountants • The PICPA is a professional association of more than 20,000 members working together to improve the profession and serve the public interest.

  3. The Fiscal Cliff What is the “Fiscal Cliff?” • “Fiscal cliff” is a phrase coined by Federal Reserve Chairman Ben Bernanke. • The term summarizes the possible impact of large tax increases and spending cuts.

  4. The Fiscal Cliff Fiscal Cliff Elements • Expiring tax breaks • New taxes in 2013 • Spending cuts

  5. The Fiscal Cliff Expiring Tax Breaks Aseries of tax measures known as the Bush tax cuts are scheduled to expire. These include: • Child tax credit • American Opportunity tax credit • “Payroll Tax Holiday” • AMT “patch” • And more

  6. The Fiscal Cliff New Taxes for 2013 New taxes will begin in 2013 as a result of the Affordable Health Care Act. These include: • A 3.8% Medicare income tax • A .09% additional Medicare Hospital Insurance tax • A 2.3% excise tax on medical device manufacturers • Increased limitation on deductible medical expenses

  7. The Fiscal Cliff Spending Cuts Large spending cuts are also set to begin in 2013: • Defense/government contracts • Discretionary income • Medicare payments • Extended unemployment

  8. The Fiscal Cliff Possible Results • Some experts predict a recession if fiscal cliff issues are not addressed before Jan. 1, 2013. • Extending the tax breaks and canceling the spending cuts, however, will add to the national debt.

  9. The Fiscal Cliff Take Action • Tax planning is a year-round undertaking. • Consider how potential tax increases and/or spending cuts may effect you. • Plan now to be in a position to take action Nov. 7

  10. The Fiscal Cliff Take Action • The American Institute of Certified Public Accountants has more resources: • Total Tax Calculator www.totaltaxinsights.org. • What’s at Stake www.aicpa.org/WhatsAtStake

  11. The Fiscal Cliff Planning Resources Visit www.ineedacpa.org • Ask a CPA • CPA Locator

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