The old saying is that only death and taxes are the inevitabilities of life.
Also inevitable, when it comes to tax breaks, Uncle Sam giveth and Uncle Sam taketh away.
It is true as some claim that American taxes are, overall, the lowest they’ve been in at least 50 years.
But hold onto your socks, because some of those deductions, maybe a couple that you love, are about to go away.
“One of the deductions that’s going away is for private mortgage insurance. That’s gone,” says Maureen Parkhill of Liberty Tax Service. “Child tax credits are going to be changing. They’re going to go back next year to the $500 level. They have been at $1000. The refundable child tax credit will be going away completely. If they have a student in college, and their expenses are coming out under a 529 plan, the deduction for a computer is going away.”
In 2012, we lose some more.
Itemized deductions, they could be going away completely beginning in 2013.
Now that depends on income.
But the break point could be, married filing jointly, $166,800.
And even school teachers will lose the deduction for money they spend out of their own pocket. So Parkhill says it’s more important than ever to talk to your tax preparer and get your withholding in order.
Rates will essentially stay the same, until the Bush tax cuts expire.
And, until we know what the so-called super committee is going to do.
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