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Tax Extenders and What They Mean for You
December 30, 2015
This month, congress voted to extend some expired tax breaks, or tax extenders under the Protecting Americans from Tax Hikes Act of 2015. Almost half of these tax provisions were extended permanently, while many more have been extended for at least one more year. The tax provisions include tax breaks for teachers, families, and even energy saving tax benefits. Below is a list of tax extenders that could potentially benefit you and your family:
Tax Breaks Extended Permanently:
Educator Expense Deduction: If youâ€™re a teacher, this tax deduction can help you save money on supplies you have purchased for students. You can deduct up to $250, unless your spouse also teaches, then you can deduct up to $500.
Enhanced Child Tax Credit: Dependents under 17 years old may be eligible for a tax credit up to $1,000. Before the permanence enhancement, the amount of money necessary to qualify for the law would increase in order to get partial or full credit.
Tax-Free Retirement Accounts and Qualified Charitable Distributions: For people who are 70-1/2 or older, you may be able to exclude up to $100,00 from income distributions if paid to an IRA account or a qualified charity. This is a great benefit for retired people who have already paid off their homes and no longer have large deductions such as mortgage interest.
Temporary Tax Break Extenders through 2016:
Tuition Deduction: Good news for students and parents with college tuition and fees. You are able to deduct up to $4,000 which includes books, supplies, and tuition. This applies to you even if you only take one class!
New Qualified Fuel Cell Motor Vehicles Credit: If a vehicle you purchased runs on either hydrogen or oxygen, it creates electricity that is known as a fuel cell vehicle. If the vehicles weighs less than 8,500 pounds, you can receive a credit of up to $4,000. If your vehicle is heavier, you may be eligible for more credit.
Mortgage Debt Exclusion: If for some reason your home goes into foreclosure, has a loan modification or short sale, you will be able to exclude the amount of debt forgiven. This is valid on your principle residence from your taxable income up to $2 million.
Nonbusiness Energy Property Credit: If you are a homeowner and made home improvements that are energy efficient, you will still be able to claim the Residential Energy Property Credit. This is worth up to $500.
With so many changes in tax deductions and credits, itâ€™s hard to know what you are eligible for. Thatâ€™s where your Denver tax specialists, Bloch, Rothman, and Associates come in. We can help you get through tax season stress-free and with a maximum return. Contact us today!Â