Employer health subsidy
As we head into a presidential election year, this subsidy will be a key topic in the broader discussion of health care reform.
Under the current tax exemption for employer-sponsored health insurance, your employer's portion of your health premium is tax-exempt. If, however, the subsidy is axed and your employer instead gives you a raise to cover those health costs, you'll have a higher taxable income or a higher tax bill, Gleckman said.
A deduction of up to $4,000 for qualified education expenses expires at the end of 2011. All or part of the amount you pay can be for classes beginning in 2012, Inman News reports. But you must make your payments in 2011.
More broadly, Obama's $467 billion in tax increases announced in September includes caps on tax deductions. The plan targets tax preferences, including those for savings accounts for higher education and health expenses.
However, many other tax credits, deductions and savings plans are still available for taxpayers to help with the expense of higher education. For more details, visit the Internal Revenue Service's education information center.
Transit commuter benefit
In November, Sen. Charles Schumer, D-N.Y., called for Congress to renew the federal mass-transit tax break. Many large employers offer transit-benefit programs that allow workers to set aside up to $230 a month of their salaries for mass-transit costs. The money is exempt from federal, state and city income taxes.
Schumer has introduced a bill to make the $230-per-month benefit permanent, The Associated Press reports. The latest extension of the benefit expires Dec. 31.
Mortgage interest deduction
To be clear, a Dec. 31 deadline is not approaching for this deduction. But with the housing market still weak, debate about how the U.S. government can support the housing market will continue into 2012.
Interest paid on a mortgage is tax-deductible if itemized. Roughly a quarter of all tax filers claim this popular tax deduction.
State sales tax deduction
The state sales tax deduction is scheduled to expire at the end of 2011.
This is a valuable tax break for residents of states without income tax -- Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
The timing of this deduction's end could wreak havoc on state and local budgets. They're already facing uncertainty about how much federal money they will get. Meanwhile, the weak economy and volatile stock market have lowered returns on state and local investments and will possibly cut income tax revenue. Adjusted for inflation, state and local revenues are below 2008 levels, said the TaxVox blog's Kim Rueben. Stay tuned.
Internet sales tax, use tax
While there's no looming Dec. 31 deadline related to sales tax, this tax issue made our list because it will continue to be newsy into 2012. Amazon.com has agreed to start collecting sales tax from its California customers in September 2012 unless there's federal legislation on the matter, The New York Times reports.
As bricks-and-mortar stores struggle, legislatures beyond California have seized on the sales tax issue. Meanwhile, most states now have a use tax that requires consumers to pay taxes every April that retailers did not collect, although taxpayers rarely do so, said the Urban Institute's Gleckman.
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Why not just cap the Schedule A at 35,000 then? That saves the middle class but eliminates the ficticious claims of the rich.
I'm all for the following... all increase revenues... helps middle class.
1. Cap the Schedule A to 35,000
2. Make a law you can't get back more than you put in... sorry people who only put in $500 and "expect" to get $5,000 time to work for your money
3. Raise the top tiers 5% each.
Everyone then put forth something other than the middle class who are working as it is. nothing "earned" is lost. If you are poor and want a bigger refund check then you need to work for your refund not just get a handout.
We are rapidly approaching a time when the tax system we have will be unable to support the government that we want,"
OMGod!! Who the heck wants government that is that BIG????
Where is the money going to come from?? From scraping by shrinking middle class..
Bring back jobs, manufacturing and personal responsibility!
End welfare for these idiotic girls who get knocked up just to collect money and then do it over and over again!
Then must use birth control and get trained to do some job!
End Corporate welfare to.. bring our money back from off shore accounts!\
End life fime pensions for politicians!
End 'pork barreling'
End 'exemptions' for insider trading for elected officials...
There you go just for starters... more revenue and NO new taxes or entitlements
This whole thing is a mess..
This is an attack on the middle class which is already in jeopardy of becoming extinct in our country. I completely agree with KONx - this will be a huge cut to those of us who still have mortgages if they take our deduction away. I itemize this deduction every year. I am single with no children so I'm taxed above and beyond by Uncle Sam. I don't have any real deductions except my house. I pay a higher tax rate because I'm single because apparently Uncle Sam wants to punish me for not walking down the aisle. I don't have any kids to write off because even though I count my dogs as children the IRS does not.
If they take this deduction away, which is thousands for me every year, then I will have to seriously consider if home ownership is even worth it. In an already slumping real estate market does our government really want even less home ownership?
We are already at historic lows and the so called American Dream of the white picket fence is a far stretch for the average American.
Seriously Congress - cut the middle class some slack! Quit attacking us! We can't afford it. We are struggling day in and day out as it is. I don't care which side of the political fence you are on. The bottom line is that our current government (on BOTH sides) is killing our country.
Do something America! Stand up and tell them enough is enough. We need financial stability. We need an opportunity to succeed. Quit beating us down! The middle class backs are breaking under the pressure. We cannot carry this load anymore!!!!
Unless trade is balanced, all the measures mentioned in this article will be temporarily. It is quite sad to see that trade deficits are not even mentioned and they are one of the main reasons for our financial troubles (besides all the wars Washington does).
Corporations have no loyalty to any country. The only thing they want is money and more return on their investments. That being said, 50 years ago or so, when global trade was not at the level it is now, big corporations in the US were stuck in the US; in other words, US economy was fitting more or less a closed economy model. This has not been the case for few decades now. Our economy is an open economy, thus acting like it is closed is a complete nonsense. There is a constant flux of money out of the system, but no one does anything about it. On top of that, the trade we have with our “partners” is anything but fair – starting from their policies and getting to their labor “practices”…
"The tax system we have can't support the Government" --------GOOD!
The Government we have doesn't represent me or anyone I know or have ever or will ever know. Right now it's set up for the corporations. It's time for a change and this is the kind of change we need. It's time for the Government to get back to being "Of the people, by the people and for the people."
LEAVING YOU WITH THIS THOUGHT, ITS NOT THE WE THE PEOPLE THAT HAVE TO ABIDE BY THE LAWS OUR GOVERNMENT IS CREATING THAT IS AFFECTING THE ECONOMY.
ITS THE WE THE PEOPLE IN WASHINGTON THAT HAVE FORGOTTEN THAT THEY ARE TO BE A GOVERNING BODY MAKING LAWS TO PROTECT THIS LAND, NOT AN OPPORTUNITY TO MAKE THEMSELVES RICH.
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