Hurry….expiring tax provisions at the end of 2013!
The American Taxpayer Relief Act of 2012 (ATRA), passed in January 2013, provided some much needed certainty to the tax code by extending (in some cases permanently) various tax deductions and credits that were scheduled to expire at the end of 2012. It should be noted, however, that some popular tax breaks were only extended for one year (through 2013) by the ATRA. Of course, Congress has made passing last second tax legislation a habit in recent years, so it's possible that some of these provisions may still be extended into 2014. At the present time though, here is what is scheduled for the chopping block at the end of 2013:
• Non-business energy tax credit; 10% credit for qualified energy-efficient improvements to your primary residence – for improvements such as HVAC systems, windows, doors, insulation, and others.
• $250 deduction for teachers for supplies & other classroom materials they purchase out-of-pocket.
• Mortgage Insurance premiums deduction – permits taxpayers with income below certain thresholds to deduct the cost of their primary mortgage insurance (PMI).
• Deduction for state & local sales taxes in lieu of state & local income taxes (popular for residents of States without an income tax – Florida, for example).
• Deduction for qualified tuition & expenses - $4,000 deduction available to taxpayers below certain income thresholds (note, the popular education credits were extended past 2013).
• Tax-free distributions from IRA's for charitable purposes – allows taxpayers to distribute up to $100,000 from an IRA directly to a charitable organization without including the distribution in income.
• 50% bonus depreciation – permits a 50% depreciation deduction on qualifying property in the first year placed in service.
• Section 179 depreciation $500,000 expensing limit – the expensing limit for 2014 is scheduled to drop dramatically to $25,000.
• 15 year straight line depreciation for certain leasehold improvements – permitted certain leasehold improvements to be depreciated over faster 15 year straight line period – vs. standard 39 year recovery.
Please contact our office if you have any questions about these expiring provisions.