Major Individual Income Tax Benefits Expiring 2011/2012

[Townsend]

http://finance.yahoo.com/taxes/article/113757/higher-taxes-next-year-foxbiz?mod=taxes-advice_strategy

Major Individual Income Tax Benefits Expiring 12/31/2011:

• Personal tax credits applied against income tax no longer apply


• Higher alternative minimum tax exemptions revert back to extraordinarily-low thresholds


• $250 school teacher expense deduction ends


• Mortgage insurance premium deduction expires


• State and local sales tax deductions expire


• Tuition and related fees deduction end


• IRA to charity tax-free transfers stop


• 2% Social Security tax reduction ends


Major Individual Income Tax Benefits Expiring 12/31/2012:

• Marriage penalty equalization ends


• Dividends taxed at capital gains rates removed, taxed at regular rates now


• Capital gains low tax rates expires


• Removal of itemized deduction phase out for higher income Americans


• Removal of personal exemption phase out for higher income Americans


• Child care deduction limit of $3,000 reverts to $2,400


• Child credit reduces from $1,000 per child to $500 per child


• Low 10% tax bracket for low income Americans is eliminated


• Lower income tax rates and smaller brackets expires


• Refundable adoption credit and reduced deduction


• American Opportunity college education credit expires


• Major reduction in earned income credits and refunds


• Income tax exemption for debt forgiven on home foreclosures and repossessions


• Deduction for student loan interest ends


• Education IRA limit drops from $2,000 to $500

[Conan71]

http://finance.yahoo.com/taxes/article/113757/higher-taxes-next-year-foxbiz?mod=taxes-advice_strategy

Interesting, the 2012 expirations will mostly affect the middle and lower tax brackets the hardest, IMO.

[Townsend]

Interesting, the 2012 expirations will mostly affect the middle and lower tax brackets the hardest, IMO.

I thought the same thing.

[Gaspar]

Interesting, the 2012 expirations will mostly affect the middle and lower tax brackets the hardest, IMO.

Teleprompter talk is cheap!

[guido911]

Teleprompter talk is cheap!

The lower/middle class will get skin in the game for sure if those tax deductions/credits expire.

[Conan71]

The lower/middle class will get skin in the game for sure if those tax deductions/credits expire.

I already have skin in the game, now it looks like I will get some hide trimmed off

[Gaspar]

I already have skin in the game, now it looks like I will get some hide trimmed off

Someone's gotta pay!

[nathanm]

Ironically, in a down economy, spending doesn't increase the deficit as much because it increases tax receipts somewhat. When the private sector isn't doing well, government spending cuts just end up increasing the deficit due to the reduction in demand, which reduces tax receipts further. If the private sector is near full employment, of course, things turn out quite differently. Deficit spending in that case merely serves to increase inflation due to the excess demand, and ends up further increasing the deficit.

Employing the already unemployed costs the federal government somewhere under 70% of what it would cost to employ someone already employed. (The increased income tax offsets the cost, as does the newly employed's spending) Needless to say, this does not work so well at the state and local levels.