Understanding U.S. taxes feels like mounting a horse blindfolded. Complicated? Yes! Scary? Definitely! Once you feel like you have a good understanding of the rules, tax codes change or expire, leaving you to learn the new system and codes.
Do you know what tax provisions kick the bucket in January 2014? According to the Joint Committee on Taxation, there are be 55 of them. Most people do not know any of these 55 expiring tax provisions.
Below are seven expired deductions that may affect your pocketbook in future years.
1.Tax-Free IRA Distributions To Charity Is No More. If you over the age of 70-1/2 and you make direct tax-free donations of up to $100,000 from an IRA to a charity of your choice, 2013 was the last year to do so. Many charities and non-profits have grown to rely on these donations, so you may want to take advantage of this deduction while it still lasts.
2.Educators Expense Deduction. If you are a kindergarten through twelfth grade teacher, instructor, counselor, principal, aide, or you work at least 900 hours per school year at a school that offers elementary education, you are eligible for this tax credit one last time. Those that qualify may deduct $250-$500 for unreimbursed expenses for materials you used in the classroom.
3.Tuition and Fees Deduction Expires. For 2013, students may claim deductions for qualified tuition and higher education fees. So, individuals may qualify for deductions up to $4,000 one last time.
4.IRS Tax Code Section 179 Expense Deduction Ends. Section 179 allows your business to deduct the full purchase price of financed or leased business equipment for that same tax year. If you are going to utilize this deduction for tax year 2013, the equipment must have been put into service between January and December of 2013.
5.Sales Tax Deductions for Cities and States. Taxpayers may chose to deduct state and local sales taxes instead of state and local income taxes. If you pay low state income taxes but like spending money and incurring sizable sales taxes because of it, this one is for you. After 2013, you will no longer be able to make itemized deductions for the larger amount paid (on that big purchase) in state sales taxes or income taxes.
6.Tax Credits for Energy Improvements on Your Property. You may qualify for a one-time credit of $500 for qualified energy-efficient improvements on primary residences.
7.Mortgage Insurance Premiums Deduction. Certain taxpayers may treat certain mortgage insurance premiums as mortgage interest on their home.
If you have further questions about expiring tax deductions, you are looking for tax resolution services, or are having IRS problems, contact tax relief professionals at US Tax Shield today.