By the end of this year, some people and small business may not get the tax breaks (reductions in tax) that they have been enjoying.
A Thomson Reuters Checkpoint Report indicates that tax breaks are slated to end for homeowners, teachers, small business, and students.
The benefits that will be expired include deductions in mortgage insurance, tuition, business property, and energy efficiency.
There are 23 federal tax provisions which will end on Dec. 31st, and some major replacement provisions will take effect on Jan. 1 2014.
The tax breaks that will be expired at the end of the year include:
- Homeowner deduction of mortgage insurance premiums.
- Tax credit for qualified energy efficiency projects, called “The Personal Energy Property Credit.”
- Tax-free exclusion to canceled mortgage debt of up to $2 million.
- Deduction of up to $250,000 of qualified retail, leasehold, and restaurant improvements.
- 100-percent gain exclusion of a Qualified Small Business Stock (QSBS).
- People claiming an above-the-line deduction for tuition and fees for qualified higher education expenses.
- Taxpayers older than 70½ being able to make tax free transfers from an IRA directly to a charity.
- Grades K–12 teachers, instructors, counselors, principals and aides being able to deduct up to $250 of out-of-pocket costs above the line.
- People choosing to deduct state and local general sales taxes as opposed to state and local income taxes.
Gains on QSBS acquired after 12/31/13 qualify for a 50% gain exclusion . Also, a percentage of the excluded gain is an AMT preference item.
It should be noted that Congress can extend or change provisions, however, this can still be a challenge for tax advisors and CPAs engaged in year-end tax planning.