Sean Urbany, CPA

As of December 31, 2013, a number of tax provisions affecting both individuals and businesses expired. Currently, it is unclear whether Congress will retroactively extend any of the provisions, but the possibility remains. A few of the notable expired provisions are outlined below:

Expired Tax Provisions for Individuals

  • Tax-free IRA distributions to charities
  • Section 179 expense deduction is now limited to a maximum deduction of $25,000
  • Income exclusion for debt forgiveness on a principal residence mortgage
  • Above-the-line deduction for teachers’ expenses up to $250
  • Above-the-line deduction for qualified higher education expenses
  • Itemized deduction for mortgage insurance premiums as deductible interest
  • Optional itemized deduction for state and local sales taxes
  • Nonbusiness energy credits

Expired Tax Provisions for Businesses

  • Section 179 expense deduction is now limited to a maximum deduction of $25,000
  • Bonus depreciation
  • 15-Year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements.
  • Credit for research and experimentation expenses
  • Work Opportunity Tax Credit

As the fate of these expired provisions is unknown, both individual taxpayers and businesses should plan accordingly. Many of these tax provisions have been extended in the past; however, this does not guarantee the same will be done for 2014. It is recommended that you consult with your tax advisor to determine the best course of action to cope with these expired tax provisions.

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