Home Breaking News Top 10 “Temporary” Tax Breaks That Are About to Become Permanent

Top 10 “Temporary” Tax Breaks That Are About to Become Permanent

by Jeremy Holcombe

Tax breaks for individuals that were once classified as “temporary” are starting to become more permanent. These tax breaks, which are also called “tax extenders,” are special-interest credits included in appropriations bills with specific expiration dates, after which the perk theoretically disappears.

Many Americans have been able to take advantage of these temporary tax breaks; and  it looks as though many of them are going to become permanent.

According to the TimesFreePress, it is increasingly common for Congress to incorporate blanket continuances into its 11th-hour scramble to fund the government. Within the panoply of budget gimmicks, this one is a beaut, since the “temporary” nature of tax extenders precludes the Congressional Budget Office from including them in its long-term deficit projections.

Dozens of temporary giveaways are scheduled to expire at year-end unless renewed by Congress. Most of these provisions have already expired at least once, but were retroactively restored during previous budget showdowns. The business research & development credit, for example, first appeared in 1981 and has been extended 15 times. Sort of like a 30-year mortgage renewed every two years.

The reasons for these tax credits being extended varies; building the economy, relieving people during tax time, and allowing for more flexible tax write-offs, etc.

You may be familiar with some of these, but here are the top 10 individual tax breaks right now:

  • Exclusion of employer contributions for medical insurance premiums and medical care.
  • Deductibility of mortgage interest on owner-occupied homes.
  • Step-up basis of capital gains at death.
  • 401(k) plans.
  • Exclusion of net imputed rental income.
  • Deductibility of nonbusiness state and local taxes other than on owner-occupied homes.
  • Employer pension plans.
  • Deductibility of charitable contributions, other than education and health.
  • Capital gains exclusion on home sales.
  • Accelerated depreciation of machinery and equipment.

Article Sources: TimesFreePress | USA Money News

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