Wednesday, January 22, 2014

Expiring deductions

     At the end of 2013 a number of tax deductions that Congress has habitually renewed each year were allowed to expire.  The word is that many of them will not be renewed this time.
     One of the expiring provisions formerly allowed people over 70 and 1/2 years old to make charitable donations of up to $100,000 directly from an IRA.  This saved tax money because the distributions were not counted as income to the IRA-owner and was therefore not subject to any limitations involved in claiming it as an itemized deduction.  It was just a direct payout from the IRA, bypassing the person's tax return.
     Another provision was a temporary measure established during the housing crash of a few years a go.  It allowed people who lost their homes and had their mortgages written off by the lender to avoid declaring the forgiveness of the mortgage as income.  This will no longer be automatic, starting in 2014.  However, there are still circumstances in which such debt forgiveness will not be taxed.
     If you have questions about the fate of a particular tax deduction, consult your favorite tax professional!

No comments:

Post a Comment