Congress is letting 55 tax breaks for individuals and businesses expire at the end of 2013.
The changes will be felt in 2015, when taxpayers file returns for 2014.
Here’s a look at some of the breaks that you won’t want to miss when you file your taxes in the new year. Next
Deduction for teacher expenses
Elementary and secondary school teachers may deduct up to $250 for expenses incurred for books, supplies, computer equipment, and other materials used in the classroom. Next
Energy efficiency credits
Taxpayers can get a credit of up to $500 if they made energy-efficient home improvements—including new windows and doors. Next
Tuition and fees deduction
A deduction of up to $4,000 is allowed for higher education expenses that you pay for yourself, spouse, or a dependent. You cannot take the deduction if your filing status is married, but you file taxes separately, or if you are claimed as a dependent on someone else’s return. Next
Commuters can set aside before taxes up to $245 per month for parking and up to $245 per month for mass transit, such as train and bus passes and van pool costs.
The monthly amount that mass transit commuters can set aside before taxes will drop to $130 in 2014. The parking benefit will go up to $250.
Mortgage insurance deduction
Households with adjusted gross incomes of $100,000 or less can deduct 100 percent of their mortgage insurance premiums. The deduction is reduced by 10 percent for each additional $1,000 of adjusted gross household income, phasing out after $109,000.
Married individuals filing separate returns who have adjusted gross incomes of $50,000 can deduct 50 percent of their mortgage insurance premiums. The deduction is reduced by 5 percent for each additional $500 of adjusted gross income, phasing out after $54,500. Next
State and local tax deduction
Taxpayers have the option of deducting state and local income tax or state and local sales tax. Both can’t be claimed.
This deduction is beneficial for taxpayers who live in a state that doesn’t collect state income taxes, or in cases where people made large purchases and paid substantial local sales tax.
Tax-free IRA distributions to charity
People age 70½ or older can make direct charitable gifts from an individual retirement account, including required minimum distributions, of up to $100,000 to public charities and not have to report the IRA distributions as taxable income on their federal income tax returns. Next
Credit for electric vehicle purchases
A credit of up to $7,500 is available for the purchase of new qualified two- or three-wheeled plug-in electric drive vehicles based on battery capacity. Next
Exclusion of forgiven debt on home
The tax code treats forgiven debts as taxable income, but this provision lets taxpayers exclude up to $2 million of that amount. Next
Credit for building energy efficient homes
Home builders are eligible for a $2,000 tax credit for a new energy efficient home that achieves 50 percent energy savings for heating and cooling over the 2006 International Energy Conservation Code and supplements, according to Energy Star.
There is also a $1,000 tax credit for builders of a new manufactured home achieving 30 percent energy savings for heating and cooling.
Credit for energy efficient appliances
A credit ranging from $25 to $225 (depending on year, type of appliance and efficiency standard met) is provided to the producer of energy efficient dishwashers, clothes washers, and refrigerators.
Employer wage credit for activated military reservists
Qualified small business employers may take a credit against their income tax liability for up to 20 percent of certain wage payments made to active duty members of the US military.
Charitable deduction for food donations from businesses
Businesses that donate food to an approved agency can claim a deduction that is equal to half of the donated food’s appreciated value. Back to the beginning
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