In a recent article by Inside Information, Bob Veres attacks the topic of expiring tax credits at the end of the 2013 calendar year. Undoubtedly, you’ve heard or read about the estimated 57 tax deductions scheduled to expire on December 31 unless Congress chooses to extend some of them. As it stands now, these 57 tax credits will be available on your 2013 tax return but will create tax increases moving forward for 2014 and beyond.
But the real question for American taxpayers remains, how will this impact me? Of the 57 expiring deductions, only a few are relevant to the average taxpayer today. Here are some of the most relevant expiring deductions:
– Deductions for state and local taxes
– Above-the-line deduction for tuition and related educational expenses for people with children or grandchildren in college
– Deduction for mortgage insurance premiums
– For retirees over 70½, you can no longer make tax-free distributions of up to $100,000 from an IRA account to charity
– School teachers lose the classroom expense deduction of up to $250 for unreimbursed expenses
– Homeowners whose homes are listing below cost basis will lose a provision that allows them to exclude any reduction in their mortgage obligation from taxable income up to a maximum of $2 million
– $500 tax credit for making energy-efficient improvements to your home
In the past, Congress has allowed some tax provisions to expire and then, retroactively, extended them for another year or two. Some believe that this will almost certainly happen with state and local tax deductions, tuition tax credit and a few others. Although the reality still remains that some beneficial tax deductions will no longer be available in 2014, chances are you are not going to feel a dramatic impact on next year’s taxes. And there is still hope that Congress may get around to extending the provisions that are most important to the American people.
Sources: https://www.jct.gov/publications.html?func=startdown&id=4499