Senate ‘Cliff’ Bill Retains Mortgage Cancellation Relief

January 1, 2013,
by Robert Freedman  

President Barack Obama has signed the agreement into law that tax rates would remain the same for most households and mortgage cancellation relief is extended in a budget package passed by the U.S. Senate to avert the so-called fiscal cliff.

The “American Taxpayer Relief Act of 2012’’ passed on a bipartisan 89-9 vote in the middle of the night and extends current tax rates for all households earning less than $450,000, and $400,000 for individual filers.

For households earning above these limits, tax rates would revert to where they were in 2003, when taxes were reduced across the board. That means taxpayers in the highest bracket would pay taxes on ordinary income at a rate of 39.6 percent, up from 35 percent.