Many tax cuts were permanently extended when The American Taxpayer Relief Act was signed into law this past January.
However, by year end, many others that were temporarily extended will now expire. These provisions had targeted their purpose to benefit businesses, individuals, charities, energy, community assistance, and disaster relief.
Some of the more popular provisions that will expire include:
• Accelerated expensing allowances through bonus depreciation and the shorter lives for some qualified real property
• Deductions for qualified tuition and,
• State and local sales tax deductions
Before the year ends, here are a few things you might considering doing before it's too late:
1) Make those much needed major purchases before year end to take advantage of the sales tax deduction. This is especially beneficial for those living in states that do not have an income tax.
2) If your major purchase includes certain energy efficient appliances, you may qualify for an energy credit. These credits can range from $50 to $300.
3) Teachers should pay their out of pocket classroom expenses before year end to take advantage of the available deduction.(up to $250)
4) Consider making real estate improvements or new investment this year. Certain expenditures can be depreciated over 15 years rather than 39 years.
5) Invest this year in machinery and equipment for your business or in real estate. The 50% write off of certain purchases is still allowable.
Before getting too worried about what's soon to expire, it's important to note that the President's 2014 budget proposal would make permanent several of these provisions. In addition, Congress has in the past allowed provisions to expire only to later retroactively extend the provisions temporarily.
If you have questions on deductions or would like a no-obligation assesment to see if you qualify, contact any of our experts in the tax department; we’ll be glad to help. Call 440-449-6800 or online at skodaminotti.com