The most popular tax breaks disappearing in 2014
Tyler, TX (KETK) — January 1st is marked on calendars as day one of personal changes, and a time to start fresh. However, Congress believes this as well, and is beginning the new year by wiping out dozens of tax breaks for 2014.
KETK spoke with experts to hear which tax breaks may be missed most.
1. Tuition and fees: There is currently a deduction for tuition and fees available for parents and students paying for college. This is deductible up to $4,000. Local financial advisor, Jay Oliver, from Rose Point Capital, advises paying all tuition before the new year, "One of the things they might be able to do if they're in a position to, is to go ahead and prepay their spring tuition in 2013, in order to take that deduction before it goes away next year".
2. Teachers' expenses: This aims to help teachers cover the cost of classroom supplies like pens, paper, and notebooks paper that they are not reimbursed for by the school. Elementary and secondary school teachers can qualify.
3. Mortgage insurance premiums: Homeowners are able to deduct mortgage insurance premiums as residence interest.
4. State and local sales tax: In states without an income tax, like Texas, taxpayers have been able to deduct state sales taxes. Oliver shared, "A strategy might be if you are planning a large purchase, and are in a position where you can go ahead and make that purchase before year end 2013, then you would be able to capture that deduction".
5. Donations through your IRA: Retirees older than 70-and-a-half have been able to make charitable donations tax free. Oliver said this could be a problem because, "At best it could reduce the amount that many people might donate to the charities".
6. Energy-efficiency: Homeowners have until the end of the month to get a credit of up to $500 if home is energy-efficient.
7. Commuter costs: Currently, commuters who take mass transit like trains or buses to work are able to receive $245 a month toward those expenses.
8. Mortgage debt forgiveness: This allows struggling homeowners to subtract any debt forgiveness from their taxable income.
For any personal questions you may have about your finances, contact your financial advisor.