On Monday, December 6th, 2010 President Obama announced a deal with Republican leaders to extend the Bush-era tax cuts for 2 years for all Americans. Here are some of the most important Bush-era tax cuts that might cost you money if they would expire.

Tax Brackets - The 10% tax bracket will expire, reverting to 15%, which would apply to all incomes below $34,550. The 25% rate would rise to 28%, the 28% rate to 31%, 33% to 36% and the 35% bracket would go up to 39.6%.

Marriage Penalty  - The standard deduction for married couples filing jointly will be eliminated, no longer a standard deduction double what it is for single filers.

 

Child Tax Credit - will fall from $1,000 to $500

 

Phase Out Personal Exemption – The phase out was gradually eliminated over time, if no extension is passed the phase out will resume at incomes over $122,500.

 
Tax rate on qualified dividends and capital gains will rise.

Read more on the list of expiring tax cuts at:www.taxfoundation.org

What could be the result of the expiring Bush cuts?

• A married couple earning $50,000 with two children under 17 would have to pay $2,900 more in federal tax while a single person at the same income would have to pay an additional $1,100.

• A married couple earning $70,350 with two children under 17 now pays $2,300 in federal tax. If the cuts expire, that bill would more than double to $4,900.

• A married couple earning $150,000 with two children under 17 would see their bill rise by $4,900 to $22,400.

Source: "Heal your cuts" - New York Post

See also: "How much your taxes may rise if the Bush cuts expire" at Money.cnn.com – a stat gives an overview of the tax hike for singles and married couples with two kids.