Congress Extends a Few Tax Breaks for You

concept of tax

So Congress wasn’t totally Scrooge-like this holiday season, as members tossed a few tax breaks to the rest of us.

They passed legislation to extend a number of tax breaks that expired at the end of last year. If they hadn’t, you wouldn’t be able to take various deductions and credits when filing your 2014 tax return.

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Among the key tax breaks for individuals:

  • IRA charitable deduction. Those 70½ and older can donate up to $100,000 this year directly from their IRA to a charity without paying income tax on the distribution.
  • Sales tax deduction. Taxpayers can choose to deduct state and local sales taxes instead of state and local income taxes paid this year — a boon to those living in states without an income tax.
  • College costs deduction. Up to $4,000 in college tuition and fees paid this year can be deducted for those within certain income limits.
  • Mortgage debt forgiveness. Singles and joint filers can deduct up to $2 million of debt forgiven by a lender this year on a principal residence. Forgiven debt is generally taxed as income.

 

Yet, don’t be too thankful to lawmakers. Like with a lot of last-minute holiday shopping, Congress in its rush failed to make these gifts permanent. They extended these tax breaks and others only through the end of this year, meaning right now you won’t be able to count on them for 2015.

Photo: Devonyu/iStock

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