“Happiness is not something you postpone for the future; it is something you design for the present.” -Jim Rohn
I’ve got some bad news for you if you think this year is going to be like any other year. It’s not.
Tax rates are higher.
Marriage penalty tax is back.
Itemized deductions phase out faster.
Exemptions phase out faster.
New Medicare surtaxes hit wages and passive income.
And a whole host of tax breaks are going away. Here’s the full list of what’s going away unless Congress acts …
Educator’s expenses. Teachers, instructors, counselors, principals and aides for kindergarten through 12th grade can deduct up to $250 out-of-pocket costs. This expires at the end of the year.
Cancellation of debt-mortgage debt forgiveness. If you lose your house to foreclosure or deed-in-lieu of foreclosure or through a short sale, you’ll have cancellation of debt income (COD). COD is normally taxable, except for the Mortgage Forgiveness Debt Relief Act of 2007. However, that exclusion is going away at the end of the year. That means the COD income would be taxable.
Mortgage insurance premiums deduction. Taxpayers with adjusted gross income of $109,000 or less can currently treat qualified mortgage insurance premiums as home mortgage interest.
Personal energy property credit. A credit subject to a $500 lifetime cap is available for qualified energy efficiency improvements and expenditures to a taxpayer’s principal residence until the last day of this year.
State and local sales taxes deduction. Many taxpayers who do not pay state income taxes can take instead the state and local sales tax deduction, but only through 2013.
By the way, these are only some of the highlights.
“Is there any good news?”
Well, I will say this — while some breaks are going away next year, there are still ways we can maneuver your 2013 return to not only position this year’s tax return for maximum savings, but also to smartly prepare you for what’s coming next year.
It starts with a simple phone call: 847-243-3600 or an email back. We can sit down and do some tax planning now, and I urge you to consider it, before it’s too late.