If you are like many Americans out there, you don’t have any extra money floating around for unforeseen expenses. We’ve written time and again about how important it is to have an emergency fund, yet many Americans don’t. They are living from paycheck to paycheck and in many cases have high credit card debt.

If that sounds familiar to you, you may want to make an extra effort to set aside some extra cash for what may be a tough January. Why is that you ask? You may have heard on the news or read in the paper that Congress has yet to make a decision on whether or not to let the Bush tax cuts expire on December 31st. The big issue between the Democrats and Republicans is whether to renew the Bush tax cuts for those making more than $ 250,000 a year. Most Republicans and some Democrats believe that it is best for the economy to avoid raising taxes for anyone, including the “rich”.

The problem is, there is little time for Congress to come to an agreement. One would think that after the election and the message sent by the American people that the two parties could get together and agree on the tax rates for 2011. Yet, it wouldn’t surprise us if they adjourned for the holidays without resolving the issue.

If there’s no resolution, the IRS will be forced to issue tax tables to employers that require larger amounts withheld for taxes. If Congress settles the issue late, the Treasury Department may be forced to issue higher withholding rates to employers. If that happens, your first paycheck may be significantly smaller than usual, putting you in a bind to pay all your Christmas bills or even your normal monthly bills.

The new Congress will likely reinstate the Bush tax cuts if it doesn’t get done before Christmas and President Obama is seen by many as likely to approve such a measure if passed in January. Nevertheless, it may take some time for payroll systems and the IRS to make proper adjustments. So, as tough as it may be, you might want to set aside a little extra cash if you can find a way to do so.