While I assumed that the Fiscal Cliff would be averted and that the politicians were just holding out until the last possible moment to have as much time as possible to haggle for the legislation they wanted, the media reports had me and many Americans holding their breath as we got closer to the edge of that cliff, which promised higher taxes for all. Instead of falling of the edge, Congress passed The American Tax Relief Act of 2012 on New Year's Day, giving the U.S. one big collective sigh of relief. Well, unless you earn $400,000 ($450,000 for joint filers) or more a year, then your tax rate goes up to 39.6%, with 20% on dividends and capital gains.
However, The American Tax Relief Act of 2012 finally provides a permanent patch for Alternative Minimum Tax (AMT), which threatened to nail many middle class Americans with additional income taxes each year for many years until an annual temporary fix was approved.
There's much more to this new tax law, such as deduction extensions, tax relief for families and more. Read America Avoids the Fiscal Cliff: This Could be Money in YOUR Pocket to get the details in plain language from the TurboTax blog. And, check out the TurboTax 2012 tax software versions, features and prices, too.