Tuesday, February 5, 2013

5 tax breaks on the chopping block

The article names these five items below as possibly on the chopping block.  If they become law, a side-effect would make income tax return preparation simpler as more people would be taking the standard deduction.  However, those who live in high cost states will most likely be unfairly punished.
  • Make employer sponsored health insurance premium taxable
  • Limit mortgage interest deduction to the primary residence and/or $500,000 in loan principal
  • Eliminate deduction of state and local taxes on Schedule A
  • Set a 2% floor for charitable contributions, much like miscellaneous itemized deductions
  • Limit exclusion for interest income on municipal bonds
This article provides the top ten tax breaks, in terms of lost revenue to the Treasury: