UPDATE as of December 19, 2014: Congress passes the Tax Increase Prevention Act of 2014 (“TIPA”), preserving popular tax breaks through December 31, 2014
As we noted below, in our original posting, Congress had allowed many popular tax breaks to lapse as of December 31, 2013. Fortunately, Congress passed, and the President signed, TIPA legislation which extends these tax breaks to December 31, 2014. The result is that many of the most-popular tax breaks of years past have been preserved for tax year 2014, including each of those noted in our original post below.
As is always the case, if you have any questions at all regarding this – or any – tax matter, please don’t hesitate to contact us to discuss your individual situation.
Tax Provisions Having Expired December 31, 2013, Pending Extension for Tax Year 2014
As has become the norm, Congress – after having allowed more than 50 tax provisions to expire as of December 31, 2013 – once again finds itself pondering retroactive tax extension legislation. The following are some of the more frequently-used provisions for which an extension has not yet been granted:
- Income exclusion for discharge of up to $2 million of qualified principal residence indebtedness.
- Tax-free IRA distributions to charities of up to $100,000 for those at least 70 ½.
- Max. $250 deduction for educational expenses of elementary and secondary school teachers.
- Premiums for mortgage insurance deductible as qualified residential interest.
- Credit for qualified energy-efficient home improvements.
- Increased Sec. 179 deduction for property placed in service beginning in 2014 (failure to extend would reduce the maximum deduction amount from $500,000 down to $25,000).