Much has been written and debated about the payroll tax cut extension passed by the U.S. Congress late in 2011. Much less has been written about all of the other popular credits and deductions that were not extended along with the payroll tax cut. The following tax breaks expired as of December 31, 2011 and will not be available on your 2012 tax return unless the government works to extend some or all of the following:
- AMT Patch – without new legislation, tens of millions of families will be subject to higher taxes due to the Alternative Minimum Tax
- Tuition and Fees Deduction – provided up to a $4,000 (subject to income limitations) deduction on income for qualifying higher education tuition and fees
- Teachers Supplies Deduction – even those teachers who do not itemize their deductions can take a $250 deduction for supplies purchased
- Mortgage Insurance Premium Deduction – subject to certain limitations, many taxpayers had been able to deduct mortgage insurance premiums paid, along with mortgage interest paid
The above listed deductions and tax breaks are just a sampling of the many provisions that might be different if no action is taken before the end of the year. With the payroll tax cut fight still looming before the end of February, it would appear that no patches or fixes are on the immediate horizon.