Favorite tax deductions of the rich - KATV - Breaking News, Weather and Razorback Sports

Favorite tax deductions of the rich

Posted: Updated:

(CNN) - A potential tax rate hike for the wealthy isn't the only reason America's top wage earners could be paying more in taxes next year.

A new CNNMoney analysis shows a limit on itemized deductions would overwhelmingly affect the wealthy. The reason for that is simple: only one-third of taxpayers itemize their returns, but 97 percent of taxpayers who earn $250,000 or more each year itemize.

The favorite tax deduction for the wealthy: subtracting state and local taxes from federal taxable income. Middle-class taxpayers most take advantage of the home mortgage interest deduction.

The debate over reducing the federal deficit has lawmakers considering a cap on deductions. The Tax Policy Center found that if a cap is set at $50,000 in deductions, taxes would go up on 86 percent of those making more than $1 million in 2015 but only 6.4 percent of those making between $100,000 and $200,

Click here for more on this story from CNNMoney.