Going Over the Cliff: What Changes, What Doesn’t

The good news: It won’t be the end of the world.

The bad news: Going over the cliff could create problems that no one should have to deal with, simply because Congress and the White House couldn’t get the job done on time.

Practically speaking, however, there is likely to be a “grace period” of a couple of weeks during which Congress could pass a deal to ward off the bulk of scheduled tax increases and spending cuts. And there are ways both may be postponed temporarily while lawmakers work that out.

Your paycheck: If you’ll be paid the first week in January, your company’s payroll processor will probably be cutting your check during Christmas week.

Since the IRS hasn’t told the payroll companies yet how much tax to withhold for 2013, payroll processors will continue to use 2012 withholding rates for the early January paychecks. In that sense, your paycheck in early January won’t be much different than what it was in December.

Read more here: http://money.cnn.com/2012/12/21/news/economy/fiscal-cliff/index.html