Today on December 18, 2014 Congress passed a number of previously expired tax breaks called tax extenders, under the Tax Increase Prevention Act of 2014 (H.R. 5771). But what does this mean for you?
These temporary tax breaks expired on December 31, 2013 and are now passed temporarily and retroactively covering tax year 2014, keeping more money in your pocket when you file your 2014 taxes this tax season.
Whether you’re a teacher, student, homeowner, or you’ve made energy efficient improvements to your home, here are some of the temporarily passed tax extenders to help you get ready for tax-time savings and find out what this may mean for you and your family:
- The Educator Expense Deduction – If you are a teacher, you can still claim up to $250 of classroom expenses for supplies, materials, books and software.
- Tuition and Fees Deduction – College students or parents can once again deduct education expenses related to schooling, including tuition, books and other supplies, up to $4,000.
- Mortgage Debt Relief – Without the mortgage debt relief tax break, taxpayers who have mortgage debt canceled or forgiven would normally be required to pay taxes on the forgiven debt. Under the extended law, up to $2 million dollars of forgiven debt on your principal residence is eligible to be excluded from your income in 2014.
- Mortgage Insurance Premiums – If your lender required you to buy mortgage insurance when you purchased a home, you may be able deduct the amount you paid for the insurance.
- Energy Tax Breaks – Homeowners who made energy efficient improvements to their homes in 2014 will still be able to claim the Residential Energy Property Credit. This credit could mean as much as $500.
- State and Local General Sales Taxes – Under this law, you still have the option to choose between deducting state and local income tax or state and local sales tax. This is especially beneficial to you if you 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.
The new tax law also includes the Achieving a Better Life Experience Act, which creates tax-favored savings accounts for individuals with disabilities along with tax related offsets.
We know your money is important to you and that’s why we’ve planned ahead for these changes. TurboTax will be up to date to reflect all recent changes and be ready for you when you begin to file your taxes.
Remember, at TurboTax, we’re here for you. If you still have questions about the tax law changes, you can get your questions answered by CPAs and Enrolled Agents.