Bohemia, NY (PRWEB) February 12, 2013
On February 12, 2013, Jim Diapoules of Diapoules & Feinstein CPAs P.C. responds to an article describing the ten biggest federal tax breaks with a comment about dealing with the IRS.
The article in CNN Money discusses the distribution of ten of the major federal tax breaks. The government loses over a trillion dollars in revenue annually to “the hundreds of tax credits, deductions, exemptions and exclusions in the tax code,” according to the article. Author Jeanne Sahadi says the ten biggest tax breaks account for most of that “lost” revenue. The article provides a list of the big ten with a breakdown of their proposed cost to federal coffers for the four years from 2013 to 2017.
The largest tax break is the health care exclusion, says Sahadi, which applies to the funds used by a company to help pay for employees’ health coverage. “The employer's contribution is treated as tax-free income to the worker,” says Sahadi, who points out that this exclusion will, over five years, cost the federal government about $760 billion.
The various tax breaks offered in relation to retirement savings -- IRAs, pensions, and 401(k)s -- as a group make up the second biggest break, and will cost the government a projected $709 billion, says Sahadi. “Right after that is the lower rate on capital gains and dividends, which will cost federal coffers an estimated $616 billion over five years.”
Sahadi summarizes the financial impact that other major tax breaks will have, including the mortgage interest deduction ($379 billion) and the Earned Income Tax credit ($326 billion), pointing out that the latter is the only break on the list “that primarily benefits low-income filers.”
“If Congress and President Obama are ever going to get serious about tax reform, they will have to rethink some of the biggest and most popular tax breaks,” says Sahadi.
Jim Diapoules says “While people and politicians point to tax reform as a panacea for curing our budget woes, this rundown of tax breaks to be eliminated shows how difficult a task tax reform will be. Remember that one person’s tax loophole is another’s cherished deductions”
Diapoules and Feinstein CPAs P.C. have been providing accounting, auditing and tax services to Greater New York City area since 1989. D&F provides our clients with great personal attention and years of professional experience in order to see them succeed and help them to feel confident.