What the Fiscal Cliff Means to You
You may find yourself thinking about this new phrase we've heard, the fiscal cliff.
If lawmakers do not reach an agreement, you could find yourself paying more in taxes, starting with your first paycheck in January. But with or without an agreement, you could see a tax hike.
There are several calculators out there to help you figure this out for yourself. One interactive Tax Police Center offers one, that showed a married couple--with two children could end up paying more than a hundred dollars more each month, depending on deductions and tax credits.
While it may sound scary, experts say just brace yourself. The withholding will vary, depending on what kind of deal is reached, or not reached in Washington.
There is something called a payroll tax holiday, that could go away, January first and result in a smaller paycheck for Americans.
If you depend on child credits, that could be reduced to $500, instead of the expected $1,000, if there is no deal.
Either way it goes there is a chance you could have a reduction in pay.
"If you look at it in total, yeah, it's coming out, check it's not like a one time hit to your paycheck, it does come out over time and you have to remember it was that way, a couple of years ago," said Jeffrey Frable, CPA with CCK Strategies.
Experts say now is the time, not to stress over the possibility of money being taken away, but to make a budget and stick to it.