Taxpayers take notice—big tax breaks are expiring this year, according to the Joint Committee on Taxation.
Don’t let Washington’s current fiscal cliff distract you from individual and business tax breaks set to expire this year.
Some individual tax breaks expiring:
Alternative Minimum Tax
Never indexed for inflation, it was created to keep wealthy people from using tax breaks to avoid paying any federal taxes. Congress adjusts the terms to keep middle-income families from paying huge tax increases.
Designed for those at least 70.5-years-old to make tax-free withdrawals of up to $100,000 a year from their Individual Retirement Accounts. Could also receive a tax break if used for charitable donations.
State and Local Sales Tax Deduction
Designed for people who live in states without state incomes taxes (Wyoming, Washington, New Hampshire, South Dakota, Nevada, Alaska, Tennessee, Texas, and Florida) taxpayers could opt for this itemized deduction instead.
Some business tax breaks expiring:
Restaurant/Store Capital Improvements
Allowed retail stores and restaurants to write of certain capital improvements over the span of 15 years instead of 39 years. Totaled $3.7 billion is costs.
Banks and Insurance Companies
Allowed financial firms to keep the profits of foreign subsidiaries from being taxed by US. Costs came to $11.2 billion.
Businesses Who Hire
Businesses that hired people in 2012 who received benefits from a government program received a tax credit of up to $2,400. Cost came to $1.8 billion.
See the full list of items expired or on the fence for 2013 here.