Greater Philadelphia Tax Professional Warns of Tax Changes and Expiring Tax Breaks
November 11, 2013
I’ve been very affected by what happened in the Philippines last week, even safely ensconced in our Greater Philadelphia tax preparation office. It’s shocking, painful, and the devastation wrought by “the worst storm of all time” is only barely being uncovered. One report I just read said that there could be 10,000+ dead in one city alone.
How have you been processing this event? Part of what often makes us all numb to these disasters is that “daily life” here in Greater Philadelphia must go on. So there’s a natural disconnect.
Here I am watching images of severe devastation — there I am grabbing a holiday-themed peppermint latte with a double shot of espresso.
But what are regular Greater Philadelphia families to do, besides pray, donate … and care? Again, I’d be interested in your thoughts.
(And, as an aside, I’d also be interested to find out if you have located an effective place to send donations — the big organizations spend so much money on “overhead”, that I find it difficult to believe I’d get the most “bang for my buck” in donating to them. Any thoughts?)
If you really press into the tragedy, it’s difficult to do anything else at all … but, fortunately or unfortunately, our lives here in Greater Philadelphia continue apace.
And while we are all — on both sides of the political aisle — painfully watching (or experiencing) the botched rollout of the AHCA or “Obamacare”, I do want to remind you that there is nothing on your 2013 taxes that will be directly affected by the law (aside from an increased tax on investment income for those making $200K plus, which has already been in place). So I’m going to continue to “hold my fire” on the situation until the political and exchange situation becomes more resolved.
But there are some things you need to know from a tax planning standpoint, because a very-distracted Congress is unlikely to move on certain expiring tax rules…
Which is why it’s important that we sit down and talk THIS MONTH if you want to take a pro-active approach to saving on your 2013 tax bill.
Here’s what’s coming down the pike…
Greater Philadelphia Tax Professional Warns of 2013 Tax Changes and Expiring Tax Breaks
“Happiness is not something you postpone for the future; it is something you design for the present.” -Jim Rohn
I’ve got some bad news for you if you think this year is going to be like any other year. It’s not.
Tax rates are higher.
Marriage penalty tax is back.
Itemized deductions phase out faster.
Exemptions phase out faster.
New Medicare surtaxes hit wages and passive income.
And a whole host of tax breaks are going away. Here’s the full list of what’s going away unless Congress acts …
Educator’s expenses. Teachers, instructors, counselors, principals and aides for kindergarten through 12th grade can deduct up to $250 out-of-pocket costs. This expires at the end of the year.
Cancellation of debt-mortgage debt forgiveness. If you lose your house to foreclosure or deed-in-lieu of foreclosure or through a short sale, you’ll have cancellation of debt income (COD). COD is normally taxable, except for the Mortgage Forgiveness Debt Relief Act of 2007. However, that exclusion is going away at the end of the year. That means the COD income would be taxable.
Mortgage insurance premiums deduction. Taxpayers with adjusted gross income of $109,000 or less can currently treat qualified mortgage insurance premiums as home mortgage interest.
Personal energy property credit. A credit subject to a $500 lifetime cap is available for qualified energy efficiency improvements and expenditures to a taxpayer’s principal residence until the last day of this year.
State and local sales taxes deduction. Many taxpayers who do not pay state income taxes can take instead the state and local sales tax deduction, but only through 2013.
Tuition and fees deduction. Individuals can claim an above-the-line deduction for tuition and fees for qualified higher education expenses.
By the way, these are only some of the highlights.
“Is there any good news, E G?”
Well, I will say this — while some breaks are going away next year, there are still ways we can maneuver your 2013 return to not only position this year’s tax return for maximum savings, but also to smartly prepare you for what’s coming next year.
It starts with a simple phone call: 1-888-ASK-NEVE or an email. We can sit down and do some tax planning now, and I urge you to consider it, before it’s too late.
To your family’s financial future …
E G Neve