JACKSONVILLE, Fla. -- Taxpayers beware. If Washington doesn't alter its path soon, your taxes will go up significantly next year.
Local small business owner Steve Arledge is worried he’s about to get burned by tax increases set to hit all Americans at year’s end.
“It's a double-edged sword. My taxes are going up; business is going down,” he told Action News.
Since opening his Philly Connection restaurant on the Southside 15 years ago, he has never seen such dark days. Small business owners like him are preparing for their taxes to go up 13 percent in January.
But it’s not only business owners who will be affected by these tax hikes.
John Reynolds, a tax principal at the LBA Group in downtown Jacksonville, said, “If the Bush tax cuts expire, everybody gets a tax increase.”
He had a busy day after an election that saw neither the presidency, nor control of either house in the U.S. Congress change political parties.
Neither the Democrats nor the Republicans in Washington have been willing to deal to extend the payroll tax break that is scheduled to expire at the end of this calendar year. If nothing changes, anyone who earns a paycheck would see their taxes go up 2 percent or up to $2,000 annually.
Reynolds said, “In addition to that, the Bush tax cuts expire on December 31st and they will in fact apply to all Americans.”
Depending upon your salary, all workers will be hit by varying degrees of tax increases.
“In the last 10 years, a married couple earning about $50,000 with a house and two kids did not pay any federal income taxes. Those folks with the Bush tax cuts expiring are probably looking at paying $2,000 to $3,000 in federal income taxes,” said Reynolds. He calls this impending fiscal cliff the worst he’s seen in his 35-year career as a CPA and hopes something can be resolved on Capitol Hill soon.
Otherwise, all of us will have to figure out how to afford a big tax increase just months from now.