Fiscal Cliff: What Is It and How Will it Affect My 2013 Paycheck?

With Christmas 2012 over, one reality check is that the looming "fiscal cliff" deadline is just a few days away.

On Dec. 31, tax cuts dating back to the George W. Bush presidential term are scheduled to expire, and President Barack Obama and congressional leaders have not reached a compromise.

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That means tax bills would increase for many middle- and upper-class taxpayers. And that means paycheck withholding for many workers would change, leaving them with less take-home pay in the new year.

Apparently, though, there will be no immediate change in withholding tables, while the situation is unresolved.

According to John Tuzynski, the IRS’ chief of employment tax policy, employers should continue to use 2012 withholding tables and personal exemption amounts until further notice.

And CNBC.com reported that employers are planning to withhold income taxes at the 2012 rates, at least for the first one or two paychecks of the new year, said Michael O'Toole of the American Payroll Association.

However, there's one caveat: If employers don't withhold enough taxes in January, they will have to withhold more later in the year to make up the difference. Otherwise, taxpayers could get hit with big tax bills, and possibly penalties, when they file their 2013 returns.

If no compromise is reached by the president and lawmakers, the hit will be noticeable in many workers' paychecks.

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A taxpayer making between $50,000 and $75,000 would get an average tax increase of $2,400 per year, according to the Tax Policy Center, a Washington research group. If the worker is paid biweekly, that's about $92 a paycheck.

About 75 percent of taxpayers got tax refunds in 2012, averaging $2,707, according to the IRS. And many people rely on tax refunds to pay bills or make major purchases.

Tell us: Do you think President Obama and Congress will reach a "fiscal cliff" deal? How would a tax increase affect your spending?