There are several widely used credits and deductions for both individuals and business that are set to expire at the end for 2013.
Here are a few of the credits and deductions that are set to expire:
- The deduction for certain elementary and secondary school teacher expenses: allows teachers to deduct up to $250 they spend to buy materials for their classroom.
- Deduction for state and local general sales taxes: allows individuals to deduct state and local general sales taxes paid instead of state and local income taxes.
- The deduction for qualified tuition and related expenses: Provides an above the line deduction for qualified expenses, up to a limit of $4,000 for taxpayers that meet certain adjusted gross income (AGI) levels.
- Tax-free distributions from IRAs for charitable purposes: allows taxpayers to distribute up to $100,000 in qualified charitable distributions from an individual retirement plan without including the distribution in income.
- The $500,000 expensing limit and $2,000,000 phaseout threshold and expanded definition of Sec. 179 property: The expensing limit will be reduced to $25,000; the phaseout threshold will drop to $200,000; and qualified real property will no longer be eligible for the Sec. 179 deduction.
- Bonus 50% first year depreciation: provides a depreciation deduction equal to 50% of the adjusted basis of qualifying property in the first year property is placed in service.
It is not clear if Congress will elect to extend the provisions that are set to expire at the end of 2013. We will just have to wait and see.
Read the full article and see the entire list of expiring provisions here.