Lawmakers have a plate full of leftovers from 2011 to keep them busy for a while. Even though the New Year is supposed to mean reforms and changes for policymakers, there is still some unfinished business left over from before the ball dropped in New York.
More than 50 expiring business and individual tax breaks are still in limbo. This is simply because the decision to extend the payroll tax cut and the issues surrounding long-term federal unemployment benefits took up too much time on Capitol Hill for policymakers to address other tax breaks that were set to expire.
More or less, Congress set a list of priorities and only tackled two of them.
This leaves taxpayers in a pickle because they don’t know what the future holds for them – they can’t plan for tax breaks if they don’t know what tax breaks are off the table.
For instance, currently taxpayers are allowed to deduct state and local income taxes on their federal returns. Recently, they had a choice: they could either deduct their income tax or the state and local taxes they paid in a given year. As of right now, those residents will not have that choice this year.
Additionally, for all of my loyal readers who happen to be teachers, unless Congress acts this year, you will no longer be able to deduct up to $250 a year for supplies and equipment for your classroom.
For more information regarding tax deductions that need to be addressed by Congress in 2012, click here.