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Benefits for Taxpayers from the New Tax Extenders Bill

Businesses and individuals have been waiting for the extension of tax breaks that expired for 2015. Businesses, in particular, have been asking the government to provide them with clarification concerning tax breaks. Many of the tax breaks expire each year and are extended further for a year. This will change with the new tax extenders bill. If the bill is passed, many of the tax breaks will become permanent, including the tax break for research and development. Financial Spots shares what the tax extenders bill holds for taxpayers:

“The full bill runs 233 pages, but here are some of the individual taxpayer highlights. Even better, the $250 tax break now will be indexed for inflation. ‘In addition, it makes permanent the state and local sales tax deduction which, as recently as 2013, gave more than 490,000 Tennesseans the ability to deduct over $1.1 billion in state and local sales tax payments from their taxable income.’ This provision allows IRA owners 70 1/2 and older to donate as much as $100,000 of account assets a year directly to one or more charities, such as schools, health care groups or churches.

“Daily commuters on Metro-North Railroad, who often pay more than $200 a month for fares, will receive an increased tax deduction for those fares under a deal that congressional leaders announced early Wednesday. The amount covered for rail and bus travel will remain roughly on par with parking benefits paid to workers who drive to the office.

“Eligibility for the earned income tax credit would permanently begin at an earnings threshold of only $3,000. Most of these provisions were set to expire at the end of 2017.

“In particular, making the Earned Income Tax Credit and Child Tax Credit permanent would help Latinos, NCLR reported.

“Obama’s signature education tax break, the American opportunity tax credit, also is now in the tax code for good.

“These tax credits provide a critical lifeline to millions of lower income families each year. The provisions that offer added help for larger families are now permanent.

“The tax package extends for 2015 and 2016 a temporary provision that lets you deduct the cost of your premiums if you itemize your deductions.

“The above-the-line deduction for qualified college tuition and fees is good for the 2015 and 2016 tax years only.

“The more generous $4,000 deduction for college expenses will be extended through 2016 with income phase-outs for the full write-off starting at the lower levels of $65,000 for individuals and $130,000 for couples.

“Homeowners who are able to get their mortgage terms modified or who face foreclosure also get only temporary tax help.

“Representative Tim Huelskamp, a frequent critic of past Republican fiscal measures, noted that the latest one fails to stop funding for women’s healthcare provider Planned Parenthood – a target of anti-abortion forces – and does nothing to stop President Barack Obama’s program to bring thousands of Syrian refugees to the United States.

“The timing of the vote is still a bit up in the air.”