There are multiple tax incentives referred to as “extenders” that may not be available after 2013. What should you do? Take advantage of them now!
→State and Local Sales Tax – Perhaps the most popular of incentives is the taxpayer choice to deduct state and local sales taxes in lieu of state and local income taxes. Have your taxes calculated both ways to understand the most beneficial use of your taxes paid.
→Teachers’ Classroom Expense Deduction – If possible make use of the small, but not insignificant, $250 above-the-line deduction for qualified unreimbursed expenses for primary and secondary education professionals.
→Exclusion of Cancellation of Indebtedness on Principal Residence – Allows taxpayers to exclude from income the forgiveness of mortgage debt of up to $2 million on a qualified principal residence. This can result in tax savings of thousands of dollars.
→Mortgage Insurance Premiums – These premiums have been allowed as an itemized deduction and treated as qualified residence interest.
→IRA Distributions to Charity – Tax-free distributions, up to a maximum of $100K by individuals older than 70.5 years made from IRAs to public charities have been allowed as an option to taking an itemized deduction.
These are some of the individual taxpayer provisions that are due to sunset after 2013. Look for an upcoming blog about business “extenders” that are due to expire.
Need help in developing a strategy to take advantage of these extenders? Give Kasperek & Co. a call!
By Lisa Day, Staff Accountant