You can now read 5 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

Red Sox Live

6

9

▼  7th Inning 0 outs

Tax hikes loom in 2011 IRS filings

WASHINGTON — Millions of families and businesses will get hit by big tax increases a lot sooner than many realize if Congress and the White House don’t agree on a plan to skirt the year-end fiscal cliff of higher tax rates and big government spending cuts.

More than 70 tax breaks enjoyed by individuals and businesses expired at the end of 2011. If Congress doesn’t extend them retroactively back to the beginning of this year, a typical middle-class family could face a $4,000 tax increase when it files its 2012 return in the spring, according to an analysis by H&R Block, the tax preparing company

Continue reading below

At the same time, businesses could lose dozens of tax breaks they have enjoyed for years, including generous credits for investing in research and development, write-offs for restaurants and retail stores that expand or upgrade, and tax breaks for financial companies with overseas subsidiaries.

Tax cuts first enacted under President George W. Bush, and extended under President Obama, are scheduled to expire next year. A temporary reduction in the Social Security payroll tax is set to vanish as well. Obama wants to let the Bush-era tax cuts expire on incomes above $200,000 for individuals and $250,000 for married couples, while extending the tax cuts for people making less.

House Speaker John Boehner and other Republicans have said they are open to more tax revenue through reducing or eliminating unspecified tax breaks.

But Boehner, an Ohio Republican, moved toward the president’s position late last week, proposing raising top rates for people earning more than $1 million in exchange for deeper spending cuts, particularly in health care and other mandatory spending programs. Obama has not accepted that offer, according to people familiar with the talks, but Boehner’s offer suggests that the negotiations are being renewed after appearing stalled just days ago.

Lost in the debate is a big package of tax breaks that already expired for 2012. Lawmakers in both parties say they expect those tax cuts to be addressed in any deal to avoid the ‘‘fiscal cliff.’’ But they don’t want to deal with them separately because that would reduce pressure to reach a broader budget agreement.

The biggest tax increase facing individuals for this year is the alternative minimum tax. The tax was first enacted in 1969 to ensure that wealthy people can’t use tax breaks to avoid paying any federal taxes.

Loading comments...
Subscriber Log In

You have reached the limit of 5 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.