Last night, Republicans and Democrats in the House of Representatives joined the Senate in passing the American Taxpayer Relief Act of 2012. That means middle-class families won’t see an increase in their income tax rates. We’ve avoided the fiscal cliff.
President Obama will sign the legislation soon. Last night, he described the agreement as, „one step in the broader effort to strengthen our economy and broaden opportunity for everybody.“
„Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,“ he said. „Millions of families will continue to receive tax credits to help raise their kids and send them to college. Companies will continue to receive tax credits for the research that they do, the investments they make, and the clean energy jobs that they create. And 2 million Americans who are out of work but out there looking, pounding the pavement every day, are going to continue to receive unemployment benefits as long as they’re actively looking for a job.“
We know that that a lot of people have questions about the deal, so we’ve pulled together some of the most important facts. Here are the seven things you need to know:
To learn more about this agreement and what comes next, be sure to watch President Obama’s full remarks.
Source: www.whitehouse.gov
The last-hour vote in Congress to avoid the „fiscal cliff“ included a provision that extends the Mortgage Forgiveness Debt Relief Act through 2013.
The debt relief act, which was scheduled to expire at the end of 2012, waives forgiveness of mortgage debt from being counted as taxable income by the Internal Revenue Service.
That applies mainly to short sales of homes, or lender-approved sales for less than the principal mortgage balance. A homeowner who owes $150,000 on the mortgage and short sells for $100,000 would have been taxed on the $50,000 difference as income, placing them in a higher tax bracket.
Other real estate-related provisions in the bill:
– Deduction for mortgage insurance premiums for filers making less than $110,000 is extended through 2013 and made retroactive to cover 2012. The tax break covers private mortgage insurance as well as mortgage insurance provided by the Federal Housing Administration, the Veterans Affairs and the Rural Housing Service.
- Fifteen-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
-The 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.