Tax Extender Update: TurboTax Has the Facts

Tax Law Changes, Tax News Taxextenderoriginal

It’s that time of the year again when the weather cools down, leaves begin to fall, and we head into the final stretch of the year.

Another typical occurrence this time of the year is Congress determining whether recently expired or expiring tax breaks called tax extenders, will be temporarily extended or passed.

A number of temporary tax breaks or extenders that may impact individuals and businesses expired at midnight on December 31, 2013, so Congress is expected to vote before the end of this year on whether these tax extenders or breaks will be extended or reinstated.

All this is nothing new for TurboTax, and don’t worry, this year will not be a nail biter like tax year 2012 when there was talk of falling off the “Fiscal Cliff.”

There really isn’t a “cliff” this year since Congress already permanently passed the Alternative Minimum Tax and the potential tax extenders are expected to be either temporarily extended or permanently passed, helping to keep more money in your pocket come tax time.

To help keep you informed, here is a short list of some of the tax extenders that are on the table for passage:

  •  The Educator Expense Deduction– If you are a teacher, this tax law allows you to claim up to $250 of classroom expenses for supplies, materials, books and software.

 

  • Tuition and Fees Deduction – College students or parents may be able to deduct education expenses related to schooling, including tuition, books and other supplies, up to $4,000 under this law.

 

  • Energy Tax Breaks – Homeowners who make energy efficient improvements to their homes that meet certain Energy Star guidelines are able to claim the Non-Business Energy Property Credit under this law. This credit could mean as much as $500.

 

  • State and Local Sales Tax Deduction – Under this law, you have the option to choose between deducting state and local income tax or state and local sales tax. This is especially beneficial for people that live in a state like Florida or Texas that doesn’t collect state income tax or if you made large purchases and paid substantial local sales tax.

 

  • Mortgage Debt Relief If extended, amounts forgiven or discharged when your principal residence is foreclosed on, sold in a short sale, or your loan is modified will not be included in your income.

So when will we know what has passed for sure? No one knows the specific date. It is expected to be after the mid-term elections in November, but no matter when and how the tax extenders are passed, TurboTax will be up to date with the latest tax laws and ready for taxpayers within a matter of days of changes to the tax code.

Check back with the TurboTax blog soon to find out the latest update regarding passage of the tax extenders.

And if you have questions, TurboTax tax experts are here for you year-round to answer your tax questions, helping you understand what these tax laws may mean to you and your family.

 

 

Comments (39) Leave your comment

  1. I have a question about student loan interest. My son is in his 3rd yr of college. My husband & I have a $25,000 Plus loan we got his 1 st yr. My son takes all the federal loans offered each yr & also gets Sallie Mae Loans to cover everything. We make too much money for him to get grants. Even though all his loans are in his name with the exception of the Plus loan. My husb & I have been paying all the interest on ALL my son’s loans since the very beginning. We do still claim him as a dependent, he’s 20, But a FT student. We also use that interest in our deductions each yr. I hope this is what we should be doing & that I don’t find out later we have been doing the wrong thing or something we are not really able to do. Can you tell me if this is correct or not?? Thank you!

  2. If I go ahead and buy turbo tax today but wait until April 2015 to file will my return include all of the most current tax rules

    1. Hi Leo,
      Yes, you will receive notices to update your software, but why wait you may receive a tax refund.
      Thank you,
      Lisa Greene-Lewis

  3. My foreclosure on my condo was filed in court in Feb. 2013. I am still awaiting the foreclosure. If the mortgage debt relief is not extended, does that apply to me since the court has had it since then?

    1. I’m no expert! Was just reading your question & I would think that you would have to be able to claim that person as a dependent in order to get relief of some type. Unless, maybe it’s considered charity somehow. Idk though, I’m just taking a guess since Noone ever ans your question!!

  4. Last year I was allowed to make a contribution directly from my IRA to my Church which resulted in some favorable tax treatment. Do you expect this option to be available for this tax year.

    1. Hi Albert,
      No, not yet. That is one of the tax extenders on the table. Keep checking back with us to find out more.
      Thank you,
      Lisa Greene-Lewis

  5. One question. Up to how much you start paying to the its? My wife just started working. We will make around 95,000 and have 6 dependents.
    Thanks.

    1. Hi Jose,
      Your salary less your dependent and personal exemptions of $3,950 each, and the standard deduction puts you in the 15% tax bracket if you are filing jointly so your tax could be close to 6,800, however if your dependents are under 17 you can get an additional credit for each of them making your tax considerably less. In addition, you may have other deductions that you are eligible for that I don’t know about. Try out TurboTax TaxCaster https://turbotax.intuit.com/tax-tools/calculators/taxcaster/ to estimate further also when you use TurboTax to do your taxes you will be walked through all of the tax deductions and credits you’re eligible for.
      Thank you,
      Lisa Greene-Lewis

  6. Hello,

    Is the deduction for PMI one of the items up for vote? As well as all the above, this too expired at midnight 2013.

    Thank you,

    Nick

    1. Hi Nick,
      Yes it is. Please check back with the TurboTax blog for updates so you can find out what passes.

      Thank you,
      Lisa Greene-Lewis

  7. I use turbo tax every year, and have never had any problems. But circumstances have changed for me. Since last year my significant other had become unemployed and his unemployment ran out forcing me to work 2 jobs. He has not been able to find work and still looks. I feel that part of his problem is his age (mid 50’s). Quite frustrating! I am wondering if I can claim him on my taxes since I have been supporting him.

  8. Any predictions on whether or not the Mortgage Debt Relief program will be extended? I am *this* close to finalizing a short sale and am, of course, concerned about the potential of getting taxed on the $110,000 that my house lost in value. Thanks.

  9. $20,000 from my ira I withdrew to pay expenses, loans because of low income. Wages for 2014 will be around 12,000 with all proper taxes withheld. How will the $20,000 impact taxes and my health insurance credit?

    1. I live in PA, I’m under age 59-1/2 & I have taken money outta my IRA in the past. I had to pay a 10% penalty, state, federal & local tax. All of which were removed prior to my receiving the money with the exception of the local tax. Which I found out later that I had to pay. When I took my money, I was told; it was of course, considered “income”!!

  10. I would like to know of you have a portion of your federally guaranteed student loan forgiven, is that considered income? I live in a low income area and am on an income contingent plan and will likely have a large amount forgiven after 10 years. I want to be prepared in the event it’s considered income.

  11. I HAVE A SON THAT TURNED 18, NOVEMBER 2014, I AM RESIDENTAL PARENT AND HEAD OF HOUSEHOLD SO I CAN CLAIM HIS ONE LAST TIME?

  12. Lisa, I have used turbo tax the last few years and really like it. I just sold a a home recently, are condo fees for your maintenance deductible for the purposes of lowering your capital gains taxes, I am single and understand I get the $250,000 exemption!!!! Thanks!

  13. In the year of 2012 taxes i used your service,and many other times,but in 2013 i received from the irs that i owed over 600.00 ,your fault as my2013 tax preparer stated . I paid it i would like to use your service this year but i paid the extra insurance,i would like to know what i can do to retrieve my loss of money.

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