Tax Relief For Middle Income Earners Passes
A tax reduction bill which passed the House last week may not have everything, but Congressmember Joseph Crowley voted for it because it provides some benefits for middleincome taxpayers and the lawmaker says he can improve on it next year.
Besides providing tax relief for middle-income families, the bill also helps U.S. troops serving overseas, provides mortgage insurance premium deductions and offers college tuition tax deductions.
“While not perfect, this tax cut bill provides some form of relief and incentives for families owning a home, sending their kids to college and making ends meet,” Crowley, Chief Deputy Whip in the House Democratic hierarchy, said.
The Queens/Bronx lawmaker, who is also on the House Financial Services Committee and will be a member of the powerful Ways & Means Committee come January, says the approved measure is a first step. “In the next Congress, I am confident that the new majority will be able to pass legislation that will continue offering critical relief while comprehensively addressing the financial burdens faced by many of our working families,” he said.
Citing some specifics of the bill, Crowley said the home ownership affordability provision gives a one-year benefit through 2007, allowing persons with a cap of $100,000 income to deduct mortgage insurance premiums on their federal income tax returns.
The middle-income families tax cut also gives a one-year chance “to prevent middle class people from seeing a massive increase in their income taxes under a provision of law known as the Alternative Minimum Tax (AMT). This is a tax levied on working people that Crowley and the Democrats have vowed to eliminate in the next Congress.
Still another one-year benefit covering 2007 permits military personnel to include combat pay, which is excluded from gross income and is thus tax-free, as earned income for purposes of calculating the Earned Income Tax Credit.
“Doing this will allow personnel with no other sources of income to qualify for the Earned Income Tax Credit and allows military personnel and their families with other income sources to obtain an increased credit,” Crowley explained.
Finally, the college tuition tax deduction provision makes higher education more affordable for one year. Under the law, Crowley pointed out, taxpayers can deduct up to $4,000 of such expenses if their adjusted gross income does not exceed $65,000 for a single return or $130,000 for a joint
return, and up to $2,000 if their income does not exceed $80,000 for a single return or $160,000 for a joint return.
The legislation now goes to President George W. Bush to be signed into law.