5 expiring IRS tax breaks to consider claiming before 2014
We all love IRS tax breaks. They help us hold on to more of the hard-earned money we make each year.
With that said, the opportunity is starting to dwindle to take advantage of some key tax-saving opportunities that are set to expire on Dec. 31, 2013 if Congress doesn’t act to extend them.
Here are 5 sun-setting tax breaks to consider acting on now before it’s too late:
1) Use energy-efficient items to remodel your home.
A dollar-for-dollar tax credit worth up to $500 is available for making certain energy-efficient improvements to your residence. These may include installing a new front door, adding more insulation, or putting in a corn stove. This credit is worth 10% of the cost of building materials. This means if the cost is $5,000, you’ll get $500 back from the IRS. The one noteworthy caveat here is that the $500 credit amount applies to cumulative claims for the credit that date back to 2006.
2) Invest in an electric vehicle.
An electric vehicle tax credit of $7,500 is available for 4-wheeled vehicles through the end of the year. They include the 2012-2014 models of the Ford Focus Electric, the 2013 Ford Fusion Energi, the 2013 Ford C-Max Energi, and the 2011-2012 models of the Nissan Leaf. A tax credit for certain 2- and 3-wheeled electric vehicles is also set to expire at the end of the year.
3) Take advantage of commuter benefits.
The transit parity tax break puts train commuters on the same level as traditional car commuters who park their cars in certain spots to defer $245 per month of their pre-tax salary to use for commuting costs. This particular tax break could expire at year’s end. If you commute to work and your employer offers this benefit, be sure to use it for the remainder of the year. Be sure to sign up for it again through your employer if Congress decides to extend it retroactively since you will be more likely to get money back from it.
4) Make charitable contributions from an IRA.
If you are 70 and a half years of age or older, you can transfer up to $100,000 from your Individual Retirement Account (IRA) to a qualifying charity. For certain taxpayers, this process is much more efficient tax-wise than taking the IRA distributions, paying income taxes on them, and contributing to a charity in order to claim an income tax deduction for the contribution.
5) Claim deductions on classroom costs if you work as a school teacher.
Some teachers purchase school supplies using their own money. In many cases, they are able to claim an above-the-line tax deduction worth up to $250 for unreimbursed expenses they incur on classroom-related items. That’s why it might be worth it to stock up on educational supplies for the entire 2013-14 school year now prior to the calendar turning to 2014.
For all of your tax needs to help you stay compliant with the IRS and hang on to more of your money, consider working with the accounting pros at Corporate Tax Network. Call CTN today at 1-866-893-5730 or visit www.corporatetaxnetwork.com.