Yup, most usable, needed tax breaks go to average/middle class Americans.
I recently wrote in a comment on HD that I think the most important, usable, and meaningful tax breaks go to average middle income Americans. Not being a tax expert, I did some digging to find them.
Perhaps Rick Connor and others know of more I missed.
Here is what I came up with.
Child Tax Credit - helps families with qualifying children by reducing their tax liability.
Earned Income Tax Credit (EITC) - the EITC can also provide significant benefits to those within the lower end of the middle-class income range, It's designed to supplement the income of working individuals and families.
Standard Deduction -The standard deduction reduces the amount of taxable income. Increases in the standard deduction can simplify tax filing and provide tax savings for many middle-class taxpayers. Seniors 65 + get an additional deduction.
SALT Deduction-allows federal deduction of state and local taxes, including property taxes.
Tax-free Social Security benefits (for many beneficiaries)- according to the SSA, projections show that an annual average of about 56 percent of beneficiary families will owe federal income tax on their benefits from 2015 through 2050
Retirement Savings Contributions - Tax-advantaged retirement accounts, such as 401(k)s and IRAs, allow middle-class individuals to save for retirement while reducing their current taxable income.
Roth accounts provide additional benefits with tax-free retirement income.
The "Saver's Credit" is also available for some moderate income tax payers contributing to retirement accounts.
Education-Related Tax Benefits - Tax credits like the American Opportunity Tax Credit and the Lifetime Learning Credit can help middle-class families offset the costs of higher education.
The Health Insurance Premium Tax Credit - This is a refundable tax credit that helps eligible individuals and families pay for health insurance premiums purchased through the Health Insurance Marketplace.
Employer-Sponsored Health Insurance Exclusions - A significant portion of healthcare funding comes from employer-provided health insurance. Employer contributions are tax-free to the worker.
IRC Section 125 Cafeteria Plans- allows workers to pay their share of different employee benefit premiums on a pre-tax basis.
Health Savings Accounts (HSAs) - HSAs are tax-advantaged savings accounts that can be used to pay for qualified medical expenses.
There are also employer-funded Health Reimbursement Accounts (HRA) plus Flexible Spending Accounts (FSA)
Of coarse, various investment tax provision like capital gains, treatment of dividends, even tax-free interest on municipal bonds apply to all taxpayers.
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