How Will the Fiscal Cliff Affect Your Paycheck?

With congress and the president still unable to come to grip with the looming deficit deadline, financial experts say a fiscal disaster may soon hit the national government.

But what does that mean for you?

It's not an easy answer.

With congress and the president unable to agree it looks like massive spending cuts and tax hikes are becoming more of a reality.

With Washington in grid lock millions of Americans watch anxiously to see how it will all affect their pocketbooks and their local economies.

Certified Public Accountant Randy Greenway says income earners should prepare for a big hit and so should government run programs

"It's going to impact Texoma because there is going to be significant reductions in spending that have come about as a result of things that were put in place for budgetary reasons in 2012, 2011-2012," he said.

The president and congress continue to talk, but it remains uncertain if they can come to an agreement before mandatory cuts take effect.

And the uncertainty makes it difficult for companies and individuals to plant for the coming year.

If no decisions are made the so called bush tax cuts and other taxes and exemptions will expire.

The highest income tax rate will rise from 35 to 39.6 percent.

Social security taxes on paychecks will also go up 2 percent from 4.2 to 6.2 percent.

And a tax will be imposed on high income brackets to pay for the new Affordable Care Act.

The tax policy center estimates that the income tax bill for the average middle class household will increase by two thousand dollars.

And while Greenway says there is little you can do to prepare for those hikes besides figuring out what you might be able to cut from your own budget he says higher income brackets are already planning ahead.

"They need to do some serious planning with regard to do you accelerate income into 2012, defer deductions into 2013 in order to minimize your tax liability in 2012 and 2013," he said.