Too busy remodeling to read every analysis of the "American Taxpayer Relief Act of 2012," the end-of-year political soap opera that had everyone worried the nation would go over the fiscal cliff? Here's the gist of at least some of what matters.
An overview of how the housing market might have been impacted, from NAHB:
"Had Congress failed to extend the expiring 2001 and 2003 tax rates, the economy may have fallen back into recession, according to the Congressional Budget Office. The resulting job losses would have reduced demand for both renter and owner-occupied housing, thereby halting the expansion of residential construction that contributed significantly to economic growth in 2012."The mortgage-interest deduction, from the Wall Street Journal:
"Another move that should benefit some homeowners is the restoration of a tax deduction for mortgage-interest premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers alike. That deduction had been absent for a year after expiring at the end of 2011. In 2009, 3.6 million taxpayers claimed this deduction, according to the National Association of Home Builders."
Impact on different tax brackets, from the New York Times:
"Only about 0.7 percent of households will be subject to an income tax increase this year .... But lawmakers' decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households will pay a larger share of income to the federal government this year...."
|Click here for a legible version of this chart!|
"The residential energy energy efficiency tax credit covers 10% of the cost of energy efficient home improvements [such as insulation and air sealing], up to a cap of $500. (Note: this is a 'lifetime' credit, so if you've taken advantage of it any time between 2005 and 2011, you can't take advantage of it again.)"
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