EASTLAKE -- The end of the lower income tax rates of the last ten years will affect family budgets in 2013.
Tax expert Jim Cunningham of Eastlake says it's hard for families to plan with the uncertainty of what tax rates and deductions will be next year.
"Most likely we won't know until December about the likelihood of these cuts being extended," Cunningham told WKYC. "Well, you can't backdate your deductions, so once we hit Decmeber 31 then you've made a decision, one way or another."
Not knowing how to budget for next year is a big problem for people like Ginny Calvey, a Lake County wife and mother of two, who works and pay taxes.
"If your taxes are going up one, two, three thousand, there is no budget. Your budget has been thrown out of the window," Calvey explained. "There's no way you can just add that into a budget."
The so-called Bush Era tax cuts, which reduced rates for all Americans in 2001 and 2003, were extended for two years in 2010. But unless congress and the president agree again, they will expire on December 31, 2012.
Republicans favor extending the tax cuts another year for all Americans. Democrats, including the president, want to exclude those making over $250,000 per year.
Cunningham, of Cunningham & Associates, says most people have not been paying close enough attention to the effect the expiration of the lower tax rates would have on them and their families.
"If they were told what the dollars were as opposed to just 'these cuts won't be renewed,' then they would probably be more up in arms," he predicted.
He said because employees would take home substantially less in their paychecks, they would be more likely to look to their employers for higher pay to make up the difference. And in this economy, Cunningham does not believe employers, especially small businesses, can afford that.
"When we're talking about taking anywhere from $100 to $300 a month out of their expendable income, it's going to make it difficult on everyone, especially small business."
The Tax Foundation, a non-partisan research group in Washington, D.C., estimates a family of four making $50,000 will see their income tax bill increase from $435 in 2012, to $2,638 in 2013.
The same family making $75,000 a year would see its tax burden increase from approximately $4,200 to $6,400 if the lower tax rates are allowed to expire.
The Tax Foundation has an online tax calculator tool which compares how much income tax would change in 2013 for an individual, couple, or family, under various scenarios being considered.