Damn the Deficit! Give us our tax breaks!
By Dan Garner, Dec 30 2015 03:02AM
In a rare display of bipartisan logrolling, on December 18th our leaders in Washington passed an "omnibus" bill authorizing $1.6 trillion in spending and tax cuts for the next fiscal year. President Obama was only too happy to sign it into law. The new House speaker, Paul Ryan (R-WI), was giddy with the excitement of it all, much to the dismay of the fiscal conservatives who thought he would be tougher than former speaker John Boehner (R-OH). 2016 is an election year and nobody wanted to play the Grinch who stole Christmas. Consequently, just about every cherished tax break was preserved and a number of tax increases were postponed.
Here is my summary of the "goodies" Uncle Sam gave the average taxpayers:
-- the refundable child tax credit of $1000 per qualifying child is made permanent;
-- the tax credits for college, up to $2500 per year per student, are made permanent;
-- those who don't qualify for the college tax credits can deduct tuition and related education expenses up to $4000 per individual or $8000 for 2 people;
-- the school teacher tax deduction of $250 for unreimbursed expenses is made permanent and will be indexed (increased) for inflation in future years;
-- those who live in states with sales taxes can deduct state and local sales taxes in the same way that state and local income taxes can be deducted;
-- homeowners selling their homes for less than their mortgage will continue to avoid taxes on the "forgiven debt" in 2016 (this provision was set to expire at the end of 2015);
-- mortgage insurance will remain deductible as qualified residence interest through 2016;
-- the excise tax on medical devices, intended to help fund "Obamacare," is postponed for the next 2 years, along with the excise tax on very generous medical insurance plans provided by employers.
In addition to the above tax breaks for individuals, a multitude of business tax breaks were made permanent including the R & D tax credit which had been "temporary" since its inception in 1982. Many other breaks were included to stimulate capital investment.
Merry Christmas and Happy New Year from Uncle Sam!