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Taxmageddon nears…or not

August 8, 2012

Taxmageddon. There, I said (and typed) it.

Yeah, it's a silly sounding word, but so is taxopocalypse and the idea of all of America lined up at the edge of a fiscal cliff.

Wait, let's just picture that last hypothetical scenario for a minute, with Representatives and Senators periously close to land's end. OK, I'm back from that little fantasy.

But what all these words and images try to illustrate is how serious our financial situation could become on Jan. 1, 2013.

Unless federal lawmakers act, on that day a raft of expiring laws could mean higher tax rates on income, investments and families.

Taxmageddon

Such a possibility has lots of folks fearful, frustrated and more than a bit angry. And the countdown to Taxmaggedon also is this week's Weekly Tax Tip.

Will our personal  and the country's, tax and fiscal situations blow up next year? Not likely.

But any thoughtful person has to do some evaluation and make as many plans as possible just in case.

I predict bet hope suspect that Congress will take action, but not until after the November election.

The House and Senate already have passed tax bills that deal with expiring Bush tax cuts. And the two chambers' tax-writing panels have done some groundwork on the extenders, those technically temporary tax provisions most of which already expired on Dec. 31, 2011.

All we're waiting for is bragging rights after Nov. 6.

If voters choose to keep things essentially the same — that is, control of Congress and the White House shared by Democrats and Republicans — then look for a short-term extension (likely a year) of the status quo.

If, however, one party gains control of the House, Senate and White House — and by one party I mean the Republicans since they have a better shot at grabbing all three than do the Democrats who hold a very slim Senate majority — then look for legislative action to be pushed into January.

That's when the then fullly in charge GOP would deal retroactively with tax laws the way they want.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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