President Obama returned to Washington to resume "fiscal cliff" talks on Thursday, after cutting short his holiday in Hawaii. Unfortunately, the likelihood of the president and Congress reaching a deal by the Dec. 31 deadline appears slim, as Democrats and Republicans have been unable to reach a compromise. The fiscal cliff refers to a series of expiring tax breaks, new taxes and spending cuts that will all take effect starting Jan. 1 unless an alternate deal is reached.
Here are 10 ways your money could be affected if there is no deal reached by the end of the year:
- Your Income Tax Rates Will Go Up The expiration of the Bush-era tax cuts on Dec. 31 means nearly every American taxpayer will see their rates go up when the rates go back to their 2001 levels. President Obama’s plan to avert the cliff includes keeping the current rates for middle- and low-income earners, while allowing the rates to increase for the highest income levels from 35 to 39.6 percent. Republicans have pushed to keep the tax cuts for everyone.