Monday, December 20, 2010

Gauging the tax deal's effect on you and the nation

The compromise between President Obama and Republicans is in the books.  Now there are just the holidays to think about.  However, shortly after the merriment ends, it will soon be time for those 1099s to start arriving in mailboxes for the onset of tax season.

The fruits of the tax compromise are somewhat sour, with the wealthiest Americans still receiving generous discounts from the government (you can find more about our take on the compromise here).  However, the deal could prove to be vital to many Americans still left financially adrift by the lingering effects of recession.

With that in mind here are a few tax calculators we found that can give you a general sense of what the tax compromise will mean for you and other Americans.  The Tax Policy Center, a collaboration of the Brookings Institution and the Urban Institute, has put together specialized calculator, showing what could have been, and what will be in store for Americans come tax time.  The calculator allows you to explore what the compromise means for you, and a variety of other Americans, in 2010 and 2011.  You can then compare those tax liabilities to two other scenarios: one in which all the Bush tax cuts and 2009 Stimulus provisions get extended, and one in which the 2001-2003 tax cuts expire.

If you want to go in-depth on what you can expect from the tax deal, the Citizens for Tax Justice, offers another calculator that provides an overview of what different tax options mean come tax time.

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