We aren’t even finished with another year and deductions, credits and other provisions are slated to go at the end of 2013. While many of the usual temporary tax deductions and credits were made permanent in 2012, there’s still a large number that were not and that are currently slated to expire or change significantly at the end of the year.
There are several surprises that will probably frustrate many. First on the chopping block will be the educator’s expenses. Teachers, instructors, counselors, principals and aides in grades K–12 can deduct up to $250 of out-of-pocket costs above the line. That is until it expires on Dec. 31, 2013.
Were you hoping for a little relief from the cancellation of debt – mortgage debt? Currently, individuals can exclude up to $2 million ($1 million for married filing separately) of COD income from qualified principal residence indebtedness that is canceled because of their financial condition or decline in value of the residence. But, this also expires on Dec. 31, 2013.
Others affecting housing are the mortgage insurance premiums deduction where taxpayers with AGI no greater than $109,000 could treat qualified mortgage insurance premiums as home mortgage interest. But this too is not going to be spared the cut. Even credits for personal energy conservation that allowed for a credit (subject to a $500 lifetime cap) to qualified energy efficiency improvements and expenditures to a taxpayer’s principal residence are set to disappear, along with many more.
But don’t worry…there are many that are staying put. The question is…will you know which? Don’t worry over keeping up with the IRS and the many changes that will come. Simply make one phone call to us at 843.706.9644 and schedule a free consultation. We’ll go through it all together and have your peace of mind waiting on the other end.