How Will The Fiscal Cliff Impact You? - Spokane, North Idaho News & Weather KHQ.com

How Will The Fiscal Cliff Impact You?

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SPOKANE, Wash – Looking through reports of what may or may not change on your tax return come January 1, 2013, you feel like you need your doctorate in accounting to figure out all the potential changes that may be coming to your family.

Mel and Jana Craven of Spokane are one of many couples curious to get that answer.

They're a middle-income couple, with grown kids and a mortgage to pay – but they also have two employees to pay at their family-owned small business.

Three years ago, the Cravens bought Northwest Speed and Marine, a boat repair shop in North Spokane, and business has been good – so far.

 But, they're worried the Fiscal Cliff may send their customers overboard. 

"For us as business owners, it's pretty critical," Mel Craven said.

Like most middle-income earners, the Cravens' income tax will go up roughly 4%, from 14% to 18%, which translates to roughly $2,000 a year.

Additionally, the tax credit for married couples is dropping from $11,900 down to $9,900, which would leave them on the hook for an additional $2,000.

And it's a good thing their kids are grown; tax credits for families with children would go down, and federal programs that help pay for college could be slashed by automatic spending cuts.

"I feel for the families who have children, we've had our children, so we know what that costs, and those costs are dramatic," Mel Craven added.  "A lot of our customers have children, and this is going to seriously affect our customers."

Their employees would also be affected – like every American – with less money to take home in their paychecks, as income taxes go up. 

However, the Craven's say they would up their employees' pay in order to cover the difference, but that would hit their own wallets even harder.

"Everything's been so tough the past few years, this is just going to make things even tougher," Jana Craven said.

Still, while it may be tough, the Cravens say they'll get by; and if going off the Fiscal Cliff helps cut the U.S. deficit, they say maybe taking the fall isn't so bad.

To find out how your own family would be affected, check out these online fiscal cliff tax calculators:

http://interactive.taxfoundation.org/taxcalc/#calculator

http://calculator.taxpolicycenter.org/

 

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