What does the fiscal cliff deal mean to you?

The ink on the fiscal cliff deal is now dry. But what does the agreement mean to your wallet today, tomorrow, and down the road?

The best guess is about three quarters of us will pay more tax this year than in 2012 as the holiday for the Social Security tax is over. It now goes from 4.2% back to the historic rate of 6.2%.

Let’s put that in real numbers, which I’ve rounded off just to give you a sense:

• If you earn $50,000 annually, that means $800 a year more in tax
• If you earn $100,000, that means $1,500 a year more in tax
• If you earn $200,000, that means $2,500 a year more in tax
• If you earn $500,000, that means $15,000 a year more in tax
• If you earn a $1,000,000 or more, that means $175,000 more in tax

As far as tax brackets, the 10% and 25% that affect most of us remain the same. Ditto for the 28% and 35% brackets.

Taxes on stocks stay the same on gains and dividends — except for very high income earners. Meanwhile, the Alternative Minimum Tax is permanently fixed.

Who will get clobbered? Just under 1% of people will pay much higher income taxes. The rate you may hear being talked about is 39.6%. But the effective rate for those folks will be much higher than that because of phase outs that manipulate taxes higher on high income earners. It could in fact be beyond 50%.

Estate taxes were about to snap back to very high rates, but now they don’t kick in until you’re talking about an estate valued at $5 million for individuals and $10 million for families. Anything above that, and 40% will be taken by Uncle Sam.

On the spending side, unemployment compensation will now be extended for almost the entire calendar year. Tax credits geared toward lower income folks continue, as do those geared toward families with kids.

What also continues is federal spending. That’s the big issue. That’s what makes the House vote on the fiscal cliff deal like a grain of sand next to a beach ball. It’s the beach ball that’s the problem!