On January 1, 2014 about 50 tax-reducing provisions expired. Tax extender bills to reinstate these provisions for 2014 have been sitting in Congress all year. On December 16, 2014, Congress finally passed the tax extenders bill. Here we are in December, and Congress has now acted to extend the expired provisions for one more year, that is through 2014, so you will be able to use them on your 2014 tax return.
They are not extended for 2015. That will take action from Congress again, if it happens.
Here are some of the highlights:
- The tax-free distributions from an Individual Retirement Account for charitable purposes (the IRA charitable tax rollover) for taxpayers over 70 ½. Is extended for another year through 2014.
- The $250 above-the-line deduction for teachers who buy books, supplies, computer equipment and the like will also be available in 2014.
- The exclusion from income of forgiven mortgage debt for qualifying homeowners whose houses were underwater is extended through 2014.
- If you have to buy Private Mortgage Insurance (PAI) when you buy your house or vacation home, the premiums are deductible and will continue to be so through 2014.
- The Energy-efficient home improvements tax credit will still be available in 2014. You can get a tax credit of up to $500 for making energy-efficient home improvement like new windows or upgraded heating/a-c equipment.
- The above-the-line deduction of up to $4,000 for higher education expenses is extended for another year. This helps college students or their parents.
- Equalization for employer-provided mass transit and parking benefits ($250 a month, up from $130 a month). Transit commuters who run all their commuting costs through their employer's transit plan should get a retroactive true up-a potential $576 extra tax savings for 2014.