Although a number of tax credits and exemptions will remain unchanged during 2012, there are a few from 2011 that will be withdrawn from the public unless Congress passes legislation.
According to The Washington Post, individual tax rates, maximum tax rate on capital gains, higher income personal exemptions and deductions, credits for adopting a child and college expense credits will remain unchanged during the following year. For an economy that is struggling and unemployment rate that remains above 8 percent, tax credits are essential for individuals struggling to balance bills and debts. Unfortunately for a number of tax payers, those over 70.5 years-old will no longer be able to make a tax-free withdrawal from their IRAs for a charitable contribution and teachers will no longer be able to claim a $250 deduction on their taxes for classroom supplies purchased with their own funds, the news source explains. While these changes may seem unfair to the consumer, the short term financing industry could take advantage of a change such as the teacher's $250 tax deduction, as a teacher could instead turn to a short term loan or short term solution.