As the number of tax breaks has increased, so has the value of some of the most popular deductions, including those for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.
How many tax breaks are there? Depends on whom you ask. The congressional Joint Committee on Taxation counts more than 300; the Treasury Department counts more than 170. Only about 8 percent of tax benefits go to corporations, on average, with most enjoyed by middle-class households.
So which tax breaks are the most popular? Here’s a quick look at the 10 most-popular tax breaks for individuals from 2011, based on number of people who take them and the cost:
1. Exclusion of employer contributions for medical insurance premiums and medical care: Worth $173.7 billion in 2011.
2. Mortgage interest deduction: $88.8 billion.
3. 401(k) plans: $62.9 billion.
4. Earned income tax credit: $62.5 billion.
5. Step-up basis of capital gains at death: $50.9 billion.
6. Exclusion of net imputed rental income: $47 billion.
7. “Making Work Pay” tax credit: $44 billion.
8. Child credit: $42.5 billion.
9. Employer plans: $42.2 billion.
10. Deduction of charitable contributions, other than education and health: $38.2 billion.
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