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Businesses brace for possible higher taxes

Friday, December 28, 2012

Whether a fiscal cliff deal is reached, before or after the deadline, many expect to pay more in taxes.

Michael Blossom, owner of two Loop boutiques, is eager to get past the contention of the fiscal cliff.

"If we ran the business the way Congress runs the government we would be long out of business," said Blossom, who owns Florodora and Florodora Shoes. He is watching to see if the payroll tax cut is maintained for employers.

"I want to be able to keep full employment, but the more expensive the payroll gets overall, the more I have to look at cutting back on how many hours we have available to give to our employees," said Blossom.

Negotiations in Washington are ongoing to avert a year-end deadline that would implement tax increases and spending cuts.

News of the ongoing debate is causing some to seek professional advice. Jeff Bronswick has been getting calls. He is a certified public accountant in Buffalo Grove with Bronswick Reicin Pollack. Bronswick says while some wealthy clients have be advised to move funds, many clients are advised to not make big moves and simply plan for tax increases.

"If they don't, that's great, and if they do, at least they're somewhat prepared. They're not happy about it," said Bronswick.

By some estimates, households with income between $40,000 and $50,000 could see taxes increase $1,700 if tax cuts expire January 1st. Households with incomes between $75,000 and $100,000 could see a tax increase of $3,600.

"I do believe that it will lead to us paying more taxes, but I think it's a diversion from other issues that are more important," said Arlene Koszyk.

"To expect to get something for nothing is not what I was taught as a child and it's not what i teach my children. You have to pay your fair share," said Curt Bolden.

Tax codes often change from year to year, but this year's uncertainty is making it challenging for some individuals and business owners to prepare their budgets.

Congress and the president have four more days to find an agreement and to allow Americans to plan for the year ahead.

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