Tax Extender Update: TurboTax Has the Facts

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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.

 

 

39 responses to “Tax Extender Update: TurboTax Has the Facts”

  1. $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?

    • 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”!!

  2. 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.

  3. 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?

  4. 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!

  5. 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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