Tax Breaks!

The Join Commission of Taxation published a list of 55 federal tax provisions that are set to expire this year a.k.a. tax breaks.  Here are a few of those that may apply to you as an individual or business taxpayer. 

State Sales Tax Deduction. Applicable to residents of states without an individual income tax.

Tuition and Fees Deduction. This allows up to a $4000 deduction for qualifying postsecondary education expenses. Check with your tax professional for details but this generally is available to couples filing jointly who make under $160,000. Make sure to pay Spring 2014 expenses by the end of 2013 to be sure to get the deduction with this year’s taxes as it may not be available next year if congress passes the Student and Family Tax Simplification Act.

Educator Expense Deduction. K-12 teachers and other classroom workers such as aides and counselors, can deduct up to $250 of unreimbursed materials and supplies expenses.

For more info go to Tax Benefits for Education at IRS.gov

Mortgage-insurance premium deduction. This allows home buyers who had to get mortgage insurance to deduct the premiums along with their mortgage-interest payments, as long as the insurance contract was issued after 2006. 

For more information, see Topic 458 at IRS.gov.

Forgiven mortgage-debt exclusion. Canceled debt is normally taxable as income. Through the end of the year, a special provision excludes up to $2 million of debt forgiveness on a principal home. This can be from a foreclosure and also might apply to forgiveness from restructuring. 

For details, go to IRS Publication 4681.

Section 179 deduction. This allows certain businesses, even those reporting on indiivudal tax returns, to deduct specific costs up front, rather than waiting and spreading out the costs over several years. The $500,000 deduction for 2013 drops to $25,000 in 2014. 

For more information, see IRS Publication 946.

Want to see all of the provisions set to expire this year? Click on the link to see the Join Commission of Taxations complete list of federal tax provisions set to expire. 

Please contact our office with further tax questions or for a referral to a professional tax preparer. Click the link or simply call 858-549-8600 to speak with us today.