Status of Some Expired Income Tax Breaks

A pile of special deductions and credits expired at the end of 2013. We expect most of them to be retroactively re-enacted. Some of these are narrowly targeted at specific industries but some have a broader impact and affect mainstream taxpayers.
These include the ability of individual income taxpayers to deduct their sales taxes instead of their income taxes. This break is important to residents of states that have no income tax like Texas, Florida, Nevada, Washington, South Dakota and Alaska.
Another important expired tax break is the exclusion from taxable income for up to $2 million of forgiveness of indebtedness in relation to foreclosure of a personal residence.
I have at least one client that is hoping for reinstatement of the provision allowing direct distributions from taxpayers individual retirement accounts (IRAs) to charities.
Bonus depreciation and the credit for research and development are important to many businesses, both large and small.
Action by congress on these expired tax provisions is not expected until late in 2014.
I guess that congress likes to keep taxpayers guessing.

- Mark S Gleason CPA
  www.lakes-cpa.com