President Obama has signed H.R. 5771, The Tax Increase Prevention Act. The bill contains a list of over 50 tax extenders that will give you more money to play with as of April 15th. Teachers, commuters, green home renovators and those who live in no-income tax states will receive tax relief on their 2014 returns.
The one-year extension of the laws that expired on December 31, 2013, will be good through Dec 31, 2014. This may make estimating your 2015 a little tricky.
Some of the most important extenders now valid through December 31, 2014 include:
- The deduction for state and local sales tax. This is particularly good for no-income tax states like Florida and Texas. It gives you the option to deduct state and local sales taxes instead of deducting state and local income tax.
- Above-the-line deduction of up to $4,000 for college expenses will help students and parents.
- Employer-provided mass transit and parking benefits will be $250 per month which is up from $130 per month. Transit commuters who run all their travel costs through their employer’s transit plan should receive a retroactive payment which may earn them up to $576 in tax savings.
- Excluding up to $2 Million in discharge of residential mortgages debts from gross income.
- Deduction for mortgage insurance payments.
- Tax credit for energy-efficient home improvements. Even though it’s listed as an “energy” extender, it will affect a homeowner’s personal tax return for the better. There is a tax credit of up to $500 for making energy efficient improvements such as new windows, upgraded heating/AC.
- Individual Retirement Account tax-free distributions for charity for taxpayers over 70 ½.
- New enhancements to the rules for donating property for conservation. This will encourage farmers, ranchers and other middle income landowners to protect the environment.
For more information on how this will affect you individually, please contact us.