You remember Emily Litella, don’t you?
She was Gilda Radner’s character on the old Saturday Night Live who seemed a bit hard of hearing and was perpetually confused about the big events and issues of the day, at least until someone made her understand that she was missing the point. Her standard response, delivered with a unembarrassed smile, was “Nevermind.”
Well, yesterday I posted about the new tax withholding tables issued by the IRS on the New Year’s Eve, as the country approached the fiscal cliff. Tax rates were set to go up across the board, and the IRS had little choice but to prepare tax withholding tables on the assumption that those new tax rates were going to go into effect.
Well, a deal on taxes was reached as we fell over the cliff yesterday, but before we hit the ground.
The “American Taxpayer Relief Act of 2012” (a bit of a stretch, as to the year, since the House didn’t pass it until January 1, 2013, although it was an approval of the Senate bill passed on New Year’s Eve) will ensure that income tax rates stay put for most Americans. Rates will go up on higher-income taxpayers ($400,000 for singles, and $450,000 married filing jointly).
There’s a whole lot of interesting stuff in the new tax act. It’s not quite the gargantuan length of the Affordable Care Act, but it’s still 157 pages long.
Lots will be written about the new tax law in coming days. For starters, here is a link to a summary of the new law prepared by the Senate Finance Committee (senate-finance-committee-summary-1).
As for the IRS tax withholding tables that were issued on December 31, 2012? Emily Litella had it right. “Nevermind.”
However, keep in mind that although the tax rates were kept the same for most taxpayers, the employee portion of the Social Security Tax will indeed go up this year to 6.2%.