The Enid News and Eagle, Enid, OK

January 10, 2013

Top tax breaks for individuals

From The Associated Press

— U.S. tax law is filled with so many credits, deductions and exemptions that Americans will be able to reduce their tax bills by about $1.1 trillion this year, according to congressional estimates.

The biggest tax breaks, and the amount they will save taxpayers this year:

  1. Employer contributions toward workers' medical insurance premiums and medical care are not taxed: $181 billion.
  2. Retirement plan contributions and earnings are not taxed: $165 billion.
  3. Mortgage interest deduction: $101 billion.
  4. Lower tax rates on long-term capital gains and qualified dividends: $84 billion.
  5. Deduction for state and local taxes: $69 billion.
  6. Deduction for charitable contributions: $46 billion.
  7. Most Social Security and veterans' benefits are not taxed: $45 billion.
  8. Interest on tax-exempt state and local government bonds is not taxed: $26 billion.
  9. When someone dies, the capital gains on his investments is not taxed: $24 billion.
  10. Income from some life insurance products is not taxed: $23 billion.

Sources: National Taxpayer Advocate; Joint Committee on Taxation.