With new legislation approved and the so-called fiscal cliff averted, the focus is now turning to the battles expected to come in the weeks ahead over the nation's budget. YNN's Lori Chung has more on what it means for you.
ALBANY, N.Y. -- "The good news is, as they've been announcing, is that the majority of people will have very minimal impact as a result of this law change," said Len Valletta of Albany Financial Group.
The impact is far less than what was feared as the nation approached the fiscal cliff. A contentious deal struck by lawmakers will raise taxes on the wealthiest Americans and temporarily stave off sweeping spending cuts. But financial experts say everyone stands to pay more.
"Everyone who earns wages pays a social security tax and that tax has been reduced by two percent for the past two years. That is expiring effective January 1st," said Valletta.
And that means someone making $30,000 a year will see $50 more in taxes siphoned from their paychecks each month. But tax experts like Mark Witte of UHY Advisors NY say consider the alternative, had a deal not been reached.
"If some of these tax credits [like] the college tuition tax credit [and] the dependent care tax credit were not extended, then people would really feel that," said Witte. "The child tax credit is a thousand dollar credit per child."
But while this deal which extends the Bush-era tax cuts for most Americans has been seen as a victory for democrats, experts say republicans will likely push for the spending cuts not included in the fiscal cliff package in the months ahead, possibly using the nation's borrowing limit as leverage.
"The debt ceiling, so that's another issue that's going to have to be dealt with," said Valletta. 'So we're going to have some minor cliffs coming up if you will [and] some additional negotiations."
Experts say the nation's spending will ultimately have to be dealt with to put the country on a path to true fiscal health. That's an issue lawmakers have put a pin in for now, but likely not for long with Congress set to act on the debt ceiling in the coming months.