Americans are still adjusting to the effects of the payroll tax increase, but these proposed 2013 tax changes could pack an even bigger financial hit.
That's because Washington is desperate for additional revenue streams.
To solve the problem, U.S. President Barack Obama and others have suggested closing some loopholes and altering deductions in order to reduce the budget deficit and avoid some of the automatic spending cuts.
Unfortunately, you probably benefit from some of these tax breaks right now.
Here's a breakdown of five tax deductions and loopholes that could be in danger.2013 Tax Changes: The Deductions and Loopholes Under Scrutiny
Any change to this break could be a major blow to the housing recovery. The first-year deduction on a $350,000, 30-year mortgage with a fixed rate of 3.75% is $13,015, and the deduction is a major selling point for would-be homeowners.
Taxing those benefits would eliminate the country's biggest tax break, as health insurance benefits taxed as regular income would raise $150 billion in revenue, according to the Joint Committee on Taxation. And taxing health benefits could force many individuals and families into plans with lower premiums and higher co-payments and deductibles.
However, taxing this cash would negatively impact many U.S. companies and would hurt the U.S. economy. That's because it would prevent companies from investing in markets outside the U.S. that have more growth potential. Plus, most of the "foreign" cash that U.S. companies hold is in fact invested in U.S. government securities in U.S. banks. If the cash is taxed, companies might have to use the money for other purposes instead of investing in those securities.
For a closer look at the 2013 tax changes that could affect you, check out this breakdown of the fiscal cliff deal tax adjustments that Washington agreed to on Jan. 1.
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