Tax Extender Update: You May Find Out Earlier if Expired Tax Provisions Will Save You Money

Even though we are still enjoying those long summer days and warm, balmy nights, you may be able to find out how you can lower your tax bill earlier this year.

Every year or two Congress votes to extend temporary tax breaks called tax extenders, but typically the tax extenders bill is voted on the end of the year.  In fact, in 2014 Congress extended certain tax benefits with about two weeks left in the year.  This year, however, may be a little different since the Senate Finance Committee is set to mark up the tax extenders bill today giving the committee more time to extend the expired tax benefits that help individuals, families, and small businesses.

What’s Next?  Once the Senate Finance Committee marks up the tax extender relief bill, it then has to go to Congress for final vote.  There is talk that the tax extenders may be voted on as early as the fall.

Here is a short list of the tax extenders on the table for passage that may save you money at tax-time:

Individual Tax Provisions

•  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.

• 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.

Energy Tax Provisions

• 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.

At this point no one knows the exact date of final passage on the tax extenders, but check back with the blog for more updates and ways to save on your taxes.  No matter when and how the tax extenders are passed, TurboTax will be up to date with the latest tax laws.