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Expiring Tax Breaks

Sunset clauses eliminate some tax breaks for 2010

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Deductions and tax credits often have a limited life-span. Congress often includes a sunset or expiration date for certain tax breaks. The following tax breaks expired at the end of 2009 and will not be available for 2010 (unless Congress passes a new law to extend these breaks).

Tax Breaks that Expired at the End of 2009

Tax Breaks Expiring in 2010

The following provisions in the tax code will expire in the year 2010. That means these tax breaks are available for 2010 and will not be available for 2011, unless Congress passes a new law to extend these incentives.
  • Homebuyer tax credit for new or repeat home buyers expired on April 30, 2010. Military personnel can take advantage of this tax credit through April 2011.
  • Tax credit for hybrid and alternative fuel vehicles expires for all makes and models at the end of 2010,
  • Itemized deduction for mortgage insurance premiums,
  • Qualified dividends taxed at capital gains rates,
  • Reduced long term capital gains tax rates of 5% or 15% will expire. Reverts to rates of 10% or 20%,
  • All provisions part of the Economic Growth and Tax Relief Reconciliation Act of 2001. In particular, the current tax brackets of 10%, 15%, 25%, 28%, 33%, and 35% are scheduled to expire at the end of 2010. The marginal tax brackets will revert to their pre-2001 levels, which were five tax rates of 15%, 28%, 31%, 36%, and 39.6%.

Sources: Publication 17, Publication 553, and report JCX-1-08 from the Joint Committee on Taxation.

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