Written by Jeff Bergman, Tax Manager
Many tax rules are written with the intention of being permanent. Many others are specifically designed with a shelf life and an expiration date that tends to creep up quickly. For whatever reasons, it always seems to be the popular tax credits and deductions that go away.
Expiring items are often granted a temporary extension. However, a significant number of popular credits and deductions terminated at the end of 2013 as their extensions expired.
Among the most notable changes was to personal deductions for qualified tuition and related expenses, which is now slated to go away. Several credits for certain purchases of appliances and home improvements related to energy savings are also no longer available. Additionally, the credit for health insurance premiums previously granted to certain taxpayers has expired. Teachers may be discouraged to learn that they no longer can use the $250 deduction for out of pocket classroom supply purchases.
Businesses will also be affected by the expiration extensions. The Section 179 expensing limit will dramatically decrease to $25,000 from $500,000. Those who claimed bonus 50% depreciation deductions will be unable in 2014 and beyond. Many other changes to credits and deductions that may have previously served as a component of businesses financial strategies may also need to be addressed.
For more information on credits and deductions that impact personal or business tax filings, contact Jeff Bergman, Tax Manager.