At different times government keeps on amending the tax laws. They also try to improve their tax returns by adding different laws to the tax return policies. There are numerous hidden taxes which are taken from the tax payers by the government. It is important that you as a tax payer are well aware of these terms so that you know about the amount you are paying and the reason for which the payment is taken from you.
History of PEASE Tax
PEASE tax was introduced during presidency of Bill Clinton. During the George W. Bush presidency, Pease was eliminated, and this remained the law through Barack Obama’s first term. Now after the “Fiscal Cliff” tax negotiations of late 2012, this tax is implemented again.
Pease (named for former congressman Donald Pease) is the acronym used for “We’re taking your Itemized Deductions away.” The PEASE limitation is similar to PEP. These taxes make you feel that you are getting all the exemptions but in reality you end up giving greater amount of tax. Through Pease a tax payer’s itemized tax deductions are reduced when your gross income reaches a certain level.
Pease tax is applied at different items. The deductible value of the mortgage interest you’re paying for your new home becomes less valuable though Pease. It is important that you are aware of the three most common itemized deductions seen on tax returns are mortgage interest, real estate taxes, and charitable contributions.
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