Tax Deductions to Expire : Who Loses?

It seems we are always wondering how we will pay for the government spending but never how we should spend less. As the deductions ratchet down the tax bill goes up and our elected representatives smile as they will have more of your money to waste.

Which Tax Deductions Expired this Year?
Source: Kelly Phillips Erb, "10 Expired Tax Provisions That Might Affect You In 2014," Forbes.com, November 24, 2014.

November 26, 2014

Each year, Congress votes on a group of bills known as "tax extenders" -- various deductions or tax credits that must be renewed year-to-year, or else they expire. Several of the provisions expired at the beginning of 2014 and have yet to be renewed. Some are speculating that Congress will vote on the extenders before Christmas. Until then, Kelly Erb at Forbes offers a list of expired tax provisions that taxpayers should take note of when they go to file their taxes:

• Educators were previously able to deduct up to $250 for books and other classroom supplies that teachers had not been reimbursed for during the school year.
• When a lender writes off a debt, the individual being forgiven is supposed to report that forgiven debt to the IRS to be counted as income. There was an exception to this rule, however, for underwater homeowners, though the provision expired last year.
• Federal tax law allows taxpayers to deduct their state income taxes for federal income tax purposes. Previously, taxpayers were instead allowed to deduct state sales taxes -- a provision that was aimed at taxpayers in states that lacked an income tax. That provision expired last year.
• One tax provision had allowed IRA holders to exclude up to $100,000 from their income if they paid IRA funds to charity. As that provision has expired, IRA holders must pay taxes when they withdraw their IRA funds for charity donations.
• Employers who hired veterans and other specified workers were previously given a tax credit of up to $9,600 per veteran, but the credit has expired for employees hired this year.

These are just a few of the 55 tax extenders that expired at the start of the year.
Which Tax Deductions Expired this Year?