There has been a buildup of debate, concern and even fear over the resolution to the federal budget issue. First, there was the pending fiscal cliff, then there was the talk of sequester. Federal lawmakers were able to avoid the fiscal cliff, but it appears as though the $85 billion of federal spending cuts will go into effect.
The order was signed on Friday, March 2 by President Obama, an act that officially put the spending reductions into place for possibly a year. No matter what side of the debate individual opinions fall on, it is clear that there is a stalemate between the White House and the Congressional lawmakers.
Much of the debate is centered on whether or not there should be tax increases for some Americans based on the level of income that they earn.
While there is no doubt that decisions need to be made and resolution is a necessity, what is unclear is how the sequester will affect the American public. The president said that many taxpayers will "have their lives disrupted in significant ways," while those on the other side said that the apocalyptic description was an exaggeration.
What this will really mean for taxpayers also remains unknown, but it is an example of how routine, tradition and "set in stone" are not language or phrases often used when it comes to taxes, both federal and state. Filing income taxes can be one of the most confusing and stressful tasks, and an honest mistake could mean serious tax penalties.
Source: Fox News, "Obama signs order to begin $85B in spending cuts," March 2, 2013
No matter what the tax climate, our Minneapolis Tax Dispute law firm is there to help individuals and families when an issue arises.