hIGhlIGhTs Of TENTATIVE AGREEmENT

Monday’s tentative budget agreement between the White House and Senate Minority Leader Mitch McConnell, R-Ky., would do the following:

Income tax rates: Extends tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.

Social Security payroll tax cut: Allows a 2 percentage point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.

Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.

Alternative minimum tax: Prevents about 30 million Americans from having to pay the tax.

Medicare: Keeps payments to doctors at the current rate.

Tax credits: Extends the credits for children and college tuition.

Estate tax: Raises the tax, but significantly less than Democrats had wanted. The value of estates over $5 million would be taxed at 40 percent, up from 35 percent.

SPENDING CUTS

One remaining issue — how to avert $110 billion in acrossthe-board spending cuts set to take effect Wednesday — moved closer to resolution when lawmakers agreed to defer the cuts for two months. Left unclear was how lawmakers would pay for the delay, which equals $24 billion.

WHAT’S NEXT

The Senate was expected to vote on fiscal cliff legislation early Tuesday. While the deadline to prevent tax increases and spending cuts has technically passed, passage of legislation within the next 72 hours would eliminate or minimize any inconvenience for taxpayers.