The fiscal cliff crisis was averted on New Year's Day, and the compromise legislation that passed both houses of Congress included several provisions relating to homeowners. The legislation, formally called the American Taxpayer Relief Act of 2012, extends mortgage cancellation relief for homeowners or sellers who had some of their mortgage debt forgiven by a lender. The legislation also extends mortgage insurance premium deductions, as well as deductions for state and local property taxes.
Also included in the legislation is the continued exclusion from taxes for gains on a principal residence sale of up to $500,000. However, Americans with incomes of $450,000 or higher are now required to pay federal taxes on the excess capital gains.
But that doesn't mean that most Americans will be spared from paying higher taxes. A data analysis published by the nonpartisan Tax Policy Center estimates that 77% of American households will face higher federal taxes in 2013 due to an increase in federal payroll taxes.
The legislation passed the House of Representatives yesterday by 257-167, following an 89-8 vote.