Tax Deductions Disappearing for 2014

Tax Form - with calculator, calendar

Request a free Tax Organizer from Carpenter Evert to make the most out of the deductions you do have. 

While many of the temporary tax deductions and credits that have been in place were made permanent in 2012, there are still a large number that were not. Some significant tax breaks are slated to expire or change significantly at the end of 2013.

Here is a list of some of the changes, courtesy of Thomson Reuters Checkpoint Services.

What it was in 2013: Grades K–12 teachers, instructors, counselors, principals and aides could deduct up to $250 of out-of-pocket costs above the line. What happens in 2014: Deduction expired on Dec. 31, 2013

What it was in 2013: Individuals could 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.  What happens in 2014: Exclusion expired on Dec. 31, 2013

What it was in 2013: Taxpayers with AGI no greater than $109,000 could treat qualified mortgage insurance premiums as home mortgage interest. What happens in 2014: Expired on Dec. 31, 2013

What it was in 2013: A credit (subject to a $500 lifetime cap) was available for qualified energy efficiency improvements and expenditures to a taxpayer’s principal residence. What happens in 2014: The credit expired on Dec. 31, 2013

What it was in 2013: The deduction limit for qualified conservation contributions by individuals was increased from 30% of AGI to 50% of AGI (100% of AGI for qualified farmers and ranchers) and the carry-forward period for qualified contributions in excess of the AGI limit is 15 years. What happens in 2014: No special rules for qualified conservation contributions, so they are subject to the 30%-of-AGI limit and have a five-year carry-forward period.

What it was in 2013: Individuals can elect to deduct state and local general sales taxes instead of state and local income taxes. What happens in 2014: Deduction expired on Dec. 31, 2013

What it was in 2013: Individuals can claim an above-the-line deduction for tuition and fees for qualified higher education expenses. What happens in 2014: Expired on Dec. 31, 2013

What it was in 2013: Taxpayers over age 70-1/2 can make tax-free transfers from an IRA directly to a charity. Any amounts so transferred count toward the individual’s required minimum distribution, but are not deductible as charitable contributions. What happens in 2014: Income exclusion for QCDs expired on Dec. 31, 2013

What it was in 2013: Qualified leasehold improvements, qualified restaurant property and qualified retail improvements are assigned a 15-year (straight-line) recovery period. What happens in 2014: All are assigned a 39-year (straight-line) recovery period.

For more information on tax credits and deductions, go to the IRS website – Credits and Deductions. Call your Carpenter, Evert and Associates tax expert at (952)831-0085 to find out how these changes will affect you this year.

To make the most out of your tax deductions, request a free Tax Organizer from Carpenter Evert and Associates.

Speak Your Mind

*