Do You Know Where Your Tax Breaks Are Going?
If you’ve been planning what to do with your tax refund, you may want to hold tight. Over 50 tax breaks are left in the hands of Congress, many of which expired in December 2013, and some that most likely effect you directly, specifically students, retirees, and homeowners.
Congress has not yet approved an extension for many of these popular tax breaks, which of course can affect how much you will (and won’t) get on your return this upcoming tax season.
It is now a waiting game to see what Congress decides, but don’t just wait- plan ahead in case these expired tax breaks get left in the dust:
- State and local tax deduction
- High education expenses deduction
- Tax-free distributions from your IRA
- Mortgage insurance premium deductions
There are also lingering deductions regarding energy efficiency, public transportation, teacher expenses, and alternative fuels.
Leaving us in the dark may also result in a delay in the start of filing season, which unfortunately may result in a delay in your tax refunds. According to Forbes, no decisions will be made until after the November elections.
Be sure to look for a new addition to your 1040 tax form as well, where you’ll be sharing whether or not you participated in the Affordable Care Act. If you did obtain health coverage this year, you will receive a new form called a 1095A- you’ll need this for your return! If you did not participate, you will be charged a penalty of 1% of your yearly household income, or $95 per person on your 2014 tax return. The penalty will increase the following year.
Tax season may not be your favorite, but it’s something we’re more than prepared for at Paragon Accountants. Get in touch with Paragon to start preparing for the upcoming season, or for any taxing concerns that may be weighing heavy on you.