Expired Tax Breaks - What Does the Future Hold?

What Deciscion will Congress Make?

At the end of 2013 many tax breaks expired. It is now up to Congress to decide which ones, if any, they are going to modify, extend, retroactively extend, or if they are going to leave things alone. While most people think businesses are the most impacted, changes in the tax code can also affect the individual taxpayer. Here are some of the most popular tax breaks for individual taxpayers that expired in 2013:

Deducting State & Local Taxes - In 2013 you had the option of claiming an itemized deduction for general state and local sales tax instead of claiming an itemized deduction for state and local income taxes.

IRA Charitable Donations - If you reached age 70 1/2 by the end of December, 2013 you had the ability to make donation sof up to $100,000 directly out of your IRA. These donations counted as your required minimum distributions for your IRA.

Forgiven Principal Residence Mortgage Debt - Normally cancelled debts count as taxable cancellation of debt income. A temporary provision allowed up to $2 million of canceled debt income frim principal residence acquisition debt that was cancelled between 2000 and 2013 to be treated as a tax free item.

Energy Efficient Home Improvements - In 2013 you were able to claim a credit of up to $500 for very specific energy saving improvements made to your primary home.

Higher Education Tuition - In 2013 you could deduct up to $4000 dependent upon your tax bracket, for qualifying higher education tuition and related fees.

It is possible that these expired federal provision will be retroactively reinstated. However, there is no way of knowing what decision will be made by Congress. The tax planning specialists at The Tax Office, Inc., are closely monitoring the situation and will advise you once Congress makes a decision. Contact us today should you have any questions.