Tax extenders are congressional bills, typically voted on near the end of every calendar year, that include provisions to renew or permanently authorize income tax breaks set to expire, according to Lisa Greene-Lewis for the Huffington Post. Examples of tax extenders passed by Congress include the American Taxpayer Relief Act of 2012, which made permanent temporary tax cuts first introduced in 2001 and 2003, and the Protecting Americans from Tax Hikes Act of 2015, states Lindsey McPherson for Tax Analysts.Continue Reading
Tax credits made permanent by the passing of the Protecting Americans from Tax Hikes Act of 2015 include enhancements to the earned income tax credit and child care credit; the option to choose between deducting state and local income tax or state and local sales tax; and the educator expense deduction, which allows teachers to write off personal funds spent to support classroom activities, explains Michael Cohn for Accounting Today. Another credit that was made permanent is nontaxable, employer-provided mass transit and parking benefits.
Temporary tax breaks extended for another year, through 2016, include the tuition and fees deduction, which allows families to deduct up to $4,000 in college expenses per year; the mortgage insurance premium deduction; and the mortgage debt forgiveness exclusion, reports Greene-Lewis.Learn more about Taxes