Nov
14

Tax Deduction for PMI on Chicago Real Estate May Go Away in 2011

November 14, 2010

chicagoland real estateOr it may not.

Many tax laws affecting individuals are in jeopardy right now, waiting for Congress to take action. On the

Equifax Personal Finance blog,  tax expert Eva Rosenberg recently outlined some of the taxes that will increase if Congress does not extend certain tax laws before 2011. One tax advantage enjoyed by millions of homeowners, the deduction for mortgage insurance premiums, could be among those to disappear.

Rosenberg’s article, “New Tax Laws for 2011,” highlights the important actions still before the lame duck Congress. If Congress does not extend some of the current credits and deductions past December 31, the typical American family will pay more to support the federal government next year. That means families will have less cash to invest in Chicago real estate.

How could the new taxes affect families? There will again be a tax penalty for being married. Once, married couples who filed jointly did not get the same deduction as singles. More recently, the standard deduction for couples was converted to a (more fair) two-times the deduction for singles. It could go back to even less than its previous level.

Without tax law changes, families with children won’t get as much of a break, either. The child tax credit will be cut in half, to $500 per child. And only $2,400 in childcare expenses will be deductible, as opposed to the $3,000 currently allowed.

If Congress does not act, the tax rate for all brackets will increase beginning next year. The 10 percent tax bracket will no longer exist, with new tax brackets starting at 15 percent and going all the way to 39.6 percent. There will be no more 0 percent capital gains tax rate. All capital gains will be taxed up to 20 percent. Dividends will be taxed more, too, up to 39.6 percent.

While Rosenberg is confident that Congress will protect typical American families from most of these tax increases, she cites one analysis that show taxes could go up by between 13 percent and 36 percent. For her full report with links to additional information – or to ask you questions about taxes – visit the

Equifax Personal Finance blog.

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About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

1 Comments

1

As an attorney in Libertyville, Illinois, who does give out some tax advice, I am becoming rather frustrated with the inability of Congress to let us know what is coming.

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