Here are the highlights of the fiscal bill
Major parts of the fiscal cliff deal
Some highlights of the fiscal bill include:
• Income taxes: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts will be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning over $300,000.
• Estate tax: Estates will be taxed at a top rate of 40 percent — up from 35 percent — with the first $5 million in value exempted for individual estates and $10 million for family estates.
• Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families will increase from 15 percent to 20 percent.
• Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills
Other changes: Extends for five years expansions of the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition. Also extends for one year accelerated "bonus" depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.
• Unemployment: Extends jobless benefits for the long-term unemployed for one year.
• Medicare: Blocks a 27 percent cut in Medicare payments to doctors for one year.
• Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.