CHAMPAIGN -- With less than a week left before Congress hits the fiscal cliff, tax experts say you should prepare your wallet for the worst.
Taxes will go up if lawmakers can not reach a deal during the first week of January. Experts say when it is all said and done, everyone's paychecks will take a hit.
Daniel Holder knows a lot about money. He owns his own accounting firm in Champaign. Holder has been warning his clients about the looming fiscal cliff.
If lawmakers in Washington can not agree on a new set of tax cuts by January 2, 2013, taxes will skyrocket. Tax brackets would start at 15 percent for the lowest income earners, while the highest would hit closer to 40 percent. The Social Security payroll tax would go up too, taking on average an extra $40 from each paycheck.
The hikes would put a strain on small businesses too. But experts say for them the real hit is the federal spending cuts. Businesses that rely on government contracts could lose up to ten percent of their income.
The increases only happen if the tax laws do not change. Experts say they thikn lawmakers will find a solution eventually, it just might not happen before the deadline.