Tax breaks to grab while you still can

As you do your taxes this year, it

As you do your taxes this year, it may be the last time you get to take advantage of dozens of tax provisions that expired at the end of 2013. (Credit: iStock)

As you do your taxes this year, it may be the last time you get to take advantage of dozens of tax provisions that expired at the end of 2013.

A total of 55 little bits of the tax code expired at year-end.

They're still in place for your 2013 tax returns, so there's no need to panic for this year. But they're in flux for 2014.


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While you're waiting for Washington to decide whether to reinstate some or all of them retroactively, you can't put off your own taxes.

Here are details on three of the most important for individuals. Take them while you still can.

Educator write-off. It's a relatively small-potatoes deduction, just $250 per individual for unreimbursed educator expenses, but for cash-strapped teachers who often spend out of pocket on their students, it's a nice little bonus.

For now, if you're an educator -- and the term, for tax purposes, includes teachers, principals, instructors, school aides and anyone else who spends at least 900 hours a year on education -- you can claim the deduction on your 2013 taxes.

A bonus while it remains in effect: You can claim it even if you don't itemize your deductions.

Special tax break for the cancellation of mortgage debt. It may come as a surprise to those who aren't tax geeks, but the tax code treats forgiven debts as taxable income.

A special provision, put in place in 2007, allows struggling homeowners to exclude up to $2 million in canceled debt on their principal residence from income.

Those who negotiated principal reductions with their banks, faced down foreclosure, or did short sales last year can still take advantage of this tax break when they do their 2013 taxes.

But unless it's renewed, homeowners now struggling to find a way out from under their debt may face a tax bill of thousands of dollars more than they would have had they done a loan modification last year.

Rollover of IRA distribution to charity. Since 2006 a popular rule has permitted those aged 701/2 and older to donate up to $100,000 from their individual retirement accounts (IRAs) to charity without paying tax.

For retirees who didn't need the money from their required minimum distributions (RMDs) for living expenses, the charitable rollover was a better deal than paying taxes on the distribution and then donating it to charity.

If you did it last year, congratulations! Claim it on this year's return. For 2014's tax planning, the best advice is to wait on both taking RMDs and making charitable contributions until there's more clarity from Washington.

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