Another handy summary from the CFS Tax Corresponder program.

The so-called Bush tax cuts are scheduled to expire at the end of this year, and while you may already know that, you may not fully understand what’s in store for you and your family.

Here’s what to expect.

Income tax brackets – rates will rise with the lowest bracket rising from 10% to 15%, the current 25% bracket being replaced by the 28% bracket, the 28% increasing to 31%, the 33% increasing to 36%, and the highest bracket increasing from 35% to 39.6%.

Dividends – depending upon your tax rate, this kind of income will be taxed at the same rate as ordinary income instead of today’s 15% maximum rate (up to 39.6%).

Capital gains rates – generally speaking, the maximum rate would rise to 20% from the current 15%. For assets held over 5 years and acquired after December 31, 2000, the rate will be 18%. For those in the lowest two tax rate brackets, currently there is an unbeatable 0% rate that applies to long-term gains and dividends collected by folks in those lowest two rate brackets of 10% and 15%. Starting next year, folks in the lowest two brackets will pay 10% on long-term gains (or 8% on gains from assets acquired after Dec. 31, 2000, and held for over five years) and 15% and 28% on dividends (compared to 0% now).

Harsher marriage penalty – the expiration of features meant to address a so-called “marriage penalty” will reduce standard deductions and push many couples into higher tax brackets. The penalty can cause a two-earner married couple to pay more in taxes than when they were single.

Return of phase-out rule for itemized deductions – before the Bush tax cuts, a phase-out rule could eliminate up to 80% of a higher-income individual’s itemized deductions for mortgage interest, state and local taxes, and charitable donations. The rule was gradually eased and finally eliminated in 2010. Next year, however, the phase-out will be back in full force unless Congress takes action and the president approves. So if you itemize and have 2013 adjusted gross income above about $175,000 (or about $87,500 if you use married filing separate status), your deduction will be reduced.

Return of phase-out rule for personal exemptions – before the Bush tax cuts, another phase-out rule could eliminate some or all of a higher-income individual’s personal exemption deduction (for 2012, the personal exemption deduction is $3,800 each). The rule was gradually cut back and finally eliminated in 2010. But it will be back next year unless Congress takes action and the president approves.

Child Tax Credit – this credit will fall from $1,000 to $500 per child under the age of 17.

Education savings – The annual contribution limit for Coverdell Education Savings Accounts would fall from $2,000 to $500 and qualified withdrawals would no longer be permitted for K-12 expenses.

Adoption Credit – Maximum credit would fall from $13,360 to $6,000 and would only be available for special needs children.

Other popular tax breaks – Deductions for state and local sales taxes, higher education and teachers’ classroom supplies all would vanish.

Estate taxes – Maximum estate tax rate would rise to 55% from the current 35%; estates valued at more than $1 million would face the tax (versus the current $5 million).

Payroll taxes – Unrelated to the expiration of the Bush Tax Cuts, individuals’ share of Social Security taxes would return from the temporary 4.2% to the normal 6.2%; the self-employment tax rate would rise from 10.4% to 12.4%.

Adding to the pressure, members of Congress will grapple with these broad-reaching tax expirations while facing national elections and a related showdown over what they should do when the nation again reaches its debt ceiling. That is the amount of debt the federal government is authorized to have. Will Congress act before the elections? It is unlikely.

That being said, some elements of the Bush tax cuts have gained bipartisan support and will probably be continued beyond this year. Examples include inflation-indexed alternative minimum tax (AMT) exemption amounts, the ability to use nonrefundable personal tax credits to offset your AMT bill, and the deduction for qualified higher education tuition and fees. The current versions of the child tax credit, earned income credit, dependent care credit, and adoption credit are also more-likely-than-not to be continued. The Bush tax cut legislation liberalized these credits, and later legislation liberalized them even more.

So, what can you do? Because the decisions Congress will eventually make are not clear, you should not make big financial decisions based upon what you think may happen.

Some quick summaries of the upcoming TaxMageddon:

From AP: Huge tax increase looms at year-end ‘fiscal cliff’

From CCH: Policy Experts Outline Tax Impact of Fiscal Cliff

Spain’s Tax Take Tumbles as Companies Go Abroad –  Government rulers still fail to realize that their tax increases will have consequences with fewer taxpayers sticking around.

The most obvious observation of the year:

Study: Obama’s Spending Plan Raises Middle Class Taxes

100 Days Until Taxmageddon –  Summary of upcoming tax hikes from Americans for tax Reform