As 2013 draws to a close, it seems more and more likely that Congress will not act to extend several federal income tax breaks that taxpayers have come to rely on. While these may expire for the tax year 2014, taxpayers still have one more filing to take advantage of these deductions before they are gone.
One tax deduction that is set to expire is the deduction for tuition and fees for college. Recent data indicates that taxpayers took advantage of this deduction which can be used for up to $4,000 per student, totaling more than $4 billion in savings for those who claimed it in 2010. To use this tax deduction for taxes before it expires, tuition and fees for the 2014 school year will need to be paid before December 31, 2013.
Another deduction that may not be around for the 2014 tax year is the deduction for energy efficient home improvements. This included things like better insulated doors and windows. Only some purchases qualified, so it is important to check the government’s Energy Star website to see if you made any qualifying purchases in 2013 that will help save the environment and your checkbook.
Each of these examples represent relatively modest tax deductions that are available on the federal level that only apply to some taxpayers. The concept behind these types of tax breaks it to encourage seeking higher education and help incentivize purchases that will be more energy efficient. When claiming these deductions it is important that you make sure no one else in the family is claiming them, since miscommunications can lead to a conflict with the IRS if both a parent and child claim the deduction for tuition paid.
Source: ABC 15, “Tax season 2014: 8 disappearing tax breaks,” Dec, 27, 2013.