Year End Tax Planning Summary For Individuals, Part 1

Boston brick building

The Expiring Provisions Reform and Efficiency (EXPIRE) Bill of 2014 and how it could effect your total tax of 2014.

With respect to expiring provisions, many taxpayer-favorable provisions expired
at the end of 2013. Congressional gridlock has prevented these provisions, known
as the “tax extenders from being enacted into law for 2014.

Earlier this year the Senate Finance Committee passed the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Bill of 2014, which would extend a number of these expired provisions to 2014 and 2015.

Many believe that Congress was just waiting until after the November elections to move forward on this Bill. Alternatively, any movement on the Bill may not come until 2015. Congress has been known to pass legislation in a tax year after the year to which the legislation applies and make that legislation retroactive. The Bill includes the following items which may impact your total tax for 2014:

Deduction for expenses of elementary and secondary school teachers

This provision allows teachers and other school professionals a $250 above-the-line tax deduction in 2014 and 2015 for expenses paid or incurred for books, supplies (other than non-athletic supplies for courses of instruction in health or physical education), computer equipment (including related software and service), other equipment, and supplementary materials used by the educator in the classroom.

Mortgage debt forgiveness

Under this provision, up to $2 million of forgiven mortgage debt is eligible to be excluded from income ($1 million if married filing separately) through tax year 2015.

Increased exclusion from income for employer-provided mass transit and
parking benefits

This provision would increase, for 2014 and 2015, the monthly exclusion from income for employer-provided transit and van-pool benefits from $130 to $250, so that it would be the same as the exclusion for employer-provided parking benefits. The provision also modifies the definition of qualified bicycle commuting reimbursement to include expenses associated with the use of a bike sharing program.

To be continued…

Do you have any questions regarding year end tax planning or your individual tax situation? Please do not hesitate to contact us at (508) 830-0007 or visit us at www.cozbycompany.com.

Advertisements

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
This entry was posted in Mortgage, Personal Finance, Personal Taxes, Tax Deductions and tagged , , , , , , , . Bookmark the permalink.