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How fiscal cliff bill will impact your 2013 taxes

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    David Selig breaks down how much more you will be paying the government in 2013

  • Duration 7:10
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This transcript is automatically generated

Welcome back aren't let's delve into the fiscal cliff Steele it's -- it's.

Confusing for -- many of us.

We keep telling you that basically nine 9% of Americans we'll not see their taxes go up but that's inaccurate because everyone's gonna see their taxes go up.

Because that payroll tax cut has not been extended so that reverts back six point 2% which means if you make 50000 dollars see there -- -- -- your tax.

Bill go up by 1000 dollars can make a hundred friend goes up -- thousand dollars -- this is gonna affect most people out there.

When you go to all of these numbers and the impact on small businesses especially with tax expert.

David -- lake.

A federal tax -- practitioner with silly -- associates and into the founder of true tax help dot com and the quotes you David for a second here you say.

2013.

Will increase the payroll tax which will provide an incentive for employers to hire less employees.

You also say taxing the rich and the productive members of society more.

Is cutting is -- cutting edge of economic insanity.

And absolutely unnecessary things for being so.

It's hard to figure out -- can.

I still.

The what are you more concerned about.

Taxes on everyone possesses security tax expert it increase or taxing that the super.

Well let's be very clear.

Right now there's a lot of taxes they're going touch and affect almost everybody.

Most notably if you sell your house any real property.

Bill be an additional tax of three point 8%.

-- -- -- for -- that's correct to pay for obamacare.

This is on -- wow on the -- -- not been talking about this for quite awhile.

And yet it just there has not been the -- in the moment because it wasn't taking place.

So if you live let's say in New York or any of the borrows who already have a transfer tax.

And now if you add this on top of it which is mandatory right off the aggregate amount that's a very big bite.

You a lot of people who say well I'm gonna use the -- of my house to supplement my retirement.

That's very importantly understand -- a lot of these people who.

During the run up to this business they wanted a tax increase for the wealthy they didn't realize it was going to affect them.

That's one of the reasons why I thought it might be a good idea that -- do go over the cliff.

Let these people get a taste of their own medicine and other words going over the cliff would have discontinued.

The earned income credit.

So a lot of these people who get back so much more than they pay -- and think nothing of -- that we're supporting them in essence.

Now they would feel what it's really liked to have skin in the game.

So.

I would say the average person who's working you'll notice an increase of approximately 6000 dollars a year.

And -- be a lot of hidden taxes is again can you tell us how you figure 6 am sure all.

Businesses for instance have been a target rich environment for this administration.

They're under the impression that you can just continuously.

Tax.

And burden of business how they treat items for instance.

If you buy item for your business you can only write off.

Now 25000.

Dollars of that expense against drink -- And then you have to either -- ties or adjust them in other words you can only write off a little better depreciated or perhaps in some cases even -- -- to the basis of the business and that means less working cap.

Capital it means that -- not really able to hire these individuals that you may have otherwise hired.

Less growth.

Less money coming in and the government makes these extrapolation this.

Of how much they're going to permit these taxes by putting on rose colored glasses it's really not tethered to reality what numbers are they looking for and positive.

Generating quite literally the best case scenario in other words if they look a business that was.

Grossing.

Ten million dollars and had.

Eight million dollars of expenses and that was two million dollars on top of this well you know.

We can just give them a little increase of let's -- 6% you'll still be fine.

The problem is this -- of cities and municipalities.

And regulatory agencies and insurance and everything in -- gone up exponentially.

So you have to make a decision if you're running a business.

Is it worth it to me to gamble to expand and hire more people to purchase more equipment what are my actually going to get if I'm only going to -- Ten cents on every dollar when everything's done and I'm going to some terrible risk.

Maybe I shouldn't do it most people are inclined to choose the -- So what does that mean for the economy -- and I believe it's going to slow down.

Drastically.

And this is the exact time we needed to grow.

We need less regulations.

Less taxation.

I'm of the opinion that were already overtaxed.

With the proviso -- a person is not a taxpayer they get back more than they -- -- had to get what percentage of people that -- more than -- hand significantly high it's probably over 40%.

And these phone are largely the people who felt that somehow the wealthy people the job creators that well.

Are getting away with something and nothing could be further from the truth right what about this IRS crackdown thank you speak are absolutely.

You'll find right now -- because of the implementation of Obama care.

-- the fact that the Internal Revenue Service will be enforcing this they have an awful lot of authority here so.

Right now you may not be prosecuted for not participating but you can lose your refund through law higher C section 64 until.

And it begs the question that if a person refuses.

To.

Go ahead and cooperate or follow this particular law will they be prosecuted under section 7201.

Trying to defeat a law because a tax law.

And hand out I suspect will be some seminal cases that we'll see in the next twelve to 24 months.

A crack what is those kind of questioning you're -- How is this going to affect me what should I do should I have a -- treat this person -- an employee.

Or as an independent contractor.

The federal government has a keen interest in treating almost all independent contractors as if they were employees.

And that way they can collect that withholding.

They can attach liability to the employer or any responsible person and the Department of Labor gets involved workers' compensation gets involved.

We'll give your viewing audience an idea of the penalties attached -- this.

If you have a person who you -- is an independent contractor and the government determines there and employee.

And you didn't have worker's comp.

But -- person it's 2000 dollar penalty every ten days.

So what if you have ten people and -- I'm doing this for two years it's tremendous and they will enforce that -- war.

Scary stuff thank you so much for joining us -- -- -- your website on the screen.

Dated -- thank you so much and AG to everybody for joining us today.

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