These Tax Breaks Ending!
Yeah, I know—Christmas is a week away and the last thing you want to think about now is taxes. But then, when does one ever want to think about taxes?
Maybe this will get your attention: you might be able to pay for a substantial chunk of your holiday glee by thinking about taxes just enough now to take advantage of some deductions that will permanently be zapped on January 01, 2014.
5 Tax Breaks That End When 2013 Ends
Trying to keep up with changes in the U.S. tax code is a bit like being Toronto mayor Rob Ford‘s public relations person: futile and frustrating. That’s one reason H&R Block booked over $2.8 billion in revenue during its most recently completed fiscal year. But the fact remains that doing your best to keep your eye on the tax ball can save you real money.
With that in mind, here’s a rundown of five tax breaks that end permanently after December 31! In some cases all you need to do is take some action before year’s end that you were going to take in 2014 anyway. But by doing it now, you’ll cut your tax bill due April 15.
- Tuition and Fees Deduction: Couples with less than $160,000 in adjusted gross income in 2013 can deduct qualified higher education expenses for a dependent. The deduction will be gone in 2014. Can you pre-pay future tuition and fees before year’s end?
- Classroom Supplies: Teachers can deduct on their 2013 taxes up to $250 in classroom supplies they bought in 2013. In 2014, not. Teachers, buy your 2014 classroom supplies now!
- Home Loan Modifications: Normally the IRS regards as income to the homeowner mortgage balances forgiven or modified down. To help the millions of U.S. homeowners crushed by the 2008 real estate price meltdown, through 2013 these benefits were not taxed. In 2014 taxation will resume as before. Complete your loan modification by December 31!
- IRA Charitable Donation: This year IRA owners age 70-1/2 and up can give up to $100,000 of an IRA distribution to charity with no tax consequences through what’s called a qualified charitable distribution. This one may not apply to a lot of you, but if it does, make your charitable distribution by year’s end.
- Sales Tax Deduction: Beginning with purchases made on 01 January 2014, you’ll no longer be able to itemize and deduct sales tax from your taxable income. If you’re planning a major purchase in the first few months of 2014, try to move it up to December so you can deduct the sales tax on your 2013 income tax return. If you live in a sales tax-less state, never mind.
How About You?
Do you have an opportunity to cash in on any of these tax breaks while you still can?