Image: Man pulling dollar sign at edge of cliff © Steve McAlister, Getty Images

The worst didn't happen. Yes, your paychecks are smaller by 2%, thanks to the expiration of the payroll tax holiday. But a slew of other tax breaks were preserved with the fiscal cliff deal -- including some that were much better than anything we've been led to expect from Congress.

Here are some of the surprising benefits of the Jan. 1 agreement:

Estate taxes are now a nonissue

OK, not quite. There will always be those who abhor "death taxes" on principle, and maybe they'll have an audience again if we ever get our deficit under control. For now, though, Congress' decisions to exempt estates worth less than $5.12 million, to make that exemption permanent (or as permanent as tax law ever is) and to index the exemption to inflation means that estate taxes won't be an issue for the vast majority of Americans.

Not that the vast majority of Americans ever had to worry. Nearly half of Americans die owning less than $10,000 in financial assets. Even when the estate-tax exemption was a lot lower -- it was $600,000 in 1997 -- fewer than 2% of those who died had enough wealth to trigger an estate-tax filing.

Now, only two estates out of 1,000 will pay the federal tax, according to the Tax Policy Center. Some states will still levy taxes on smaller estates (New Jersey's exemption is just $675,000). A diminishing handful of states also tax certain inheritors. But for the vast majority, there will be no taxes at death.

Liz Weston

Liz Weston

What if you're really lucky and your estate (or that of your folks) is big enough to worry about estate taxes? Here are two more bonuses from the fiscal cliff deal:

  • The gift-tax exemption. Congress made the lifetime gift-tax exemption the same as the estate-tax exemption. (Many estate-planning experts had expected the gift-tax exemption to fall to $1 million, even if Congress approved a higher estate-tax exemption.) That means wealthy people can move more than $5 million out of their estates while they're still alive without facing the gift tax. The money and assets thus gifted can continue to grow without incurring estate tax when the donor dies.
  • An end (for now at least) to a lot of uncertainty. Estate-planning attorneys pulled out their hair for years trying to figure out how to advise their clients, as Congress played with an estate-tax system that waxed, waned and even disappeared for a year in 2010. Now, at least there's some certainty about what to expect, making it easier to plan for the inevitable.

The AMT has finally been fixed

Maybe you've never heard of the Alternative Minimum Tax or faced it at tax time. Consider yourself lucky. This system, which was originally intended to make sure the wealthy didn't escape income taxes entirely, has threatened a growing number of middle-income households because it was never indexed to inflation. People who had a lot of deductions -- because they had several children, for example, or lived in a high-tax state -- were subject to the AMT even if they were far from rich. About 4 million families pay it, and Congress kept having to "patch" the system to keep it from affecting tens of millions more.

The patches are over. Exemption amounts will be $51,900 for singles and $80,800 for married couples filing jointly in 2013 and will be indexed thereafter to inflation. If you're not subject to the AMT now, you likely won't be in the future unless you get a significant boost in your income. If you are subject to the AMT, the permanent fix means you may be able to shift income and deductions so that you have to pay it only every other year. Talk to your tax pro.

NASCAR and bank breaks survive

Our wallets and our economy were at stake. All eyes were on Congress. Yet our lawmakers were still brazen enough to fold into the fiscal cliff deal some egregious tax giveaways for their corporate buddies.

The most notorious of these has been dubbed "the NASCAR loophole." Since 2004, racetrack builders have been able to depreciate, or write off the value, of their tracks at a much faster rate than other commercial property owners can. The fiscal cliff deal extended that loophole, at an expected cost of $46 million for 2013, according to tax research firm CCH.

That was small potatoes compared with the $11 billion gift Congress gave Wall Street banks by extending a tax break on so-called active financing, as reported by The Washington Post. This deal allows financial services firms and manufacturers to defer U.S. income on certain transactions, a break that promoters say helps U.S. firms compete. Detractors say it encourages companies to create jobs overseas.

That's not all Wall Street got. Congress also extended tax-free financing for Lower Manhattan that's been used to build expensive apartments and Goldman Sachs' new headquarters, according to Bloomberg.

How can these giveaways possibly be a good thing? Because they're shining a light on an unfair system being manipulated by special interests.

The only way we're ever going to get a simpler, fairer tax code is if the people -- that means you and me -- finally get sick enough of these carve-outs and insist that Congress knocks it off. How many more billions for Wall Street will it take for you to contact your lawmakers and let them know how you feel?

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.

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