As temporary tax breaks expire and are re-extended, it is sometimes confusing to remember which ones are effective for a particular tax year. Here are several deductions that are still available for your 2013 federal income tax return.
- Teacher expenses. If you’re an eligible educator, you can deduct up to $250 of out-of-pocket expenses for classroom supplies and materials. The deduction is above-the-line — meaning you don’t have to itemize to claim it.
- Tuition. Another above-the-line tax-saver available for 2013 is the tuition and fees deduction for higher-education expenses you pay for yourself, your spouse, or your dependents. The maximum deduction for 2013 when you’re married filing a joint return is $4,000. Income limits apply.
- State and local sales tax. You can benefit from this itemized deduction by choosing to claim state and local sales taxes that you paid during 2013 instead of state and local income taxes. You have the option of claiming the actual amount based on receipts, or using an amount from IRS-created tables. If you use the IRS tables, you can add the sales tax you paid for certain large purchases such as vehicles.
- Asset expensing. Under a tax provision called the Section 179 deduction, you can choose to expense the full cost of new or used assets you placed in service during the year. For 2013, the maximum Section 179 deduction is $500,000 when total asset purchases for the year are $2 million or less.
- Bonus depreciation. New equipment with a depreciable life of 20 years or less, certain leasehold improvements, and computer software are eligible for an additional, or “bonus,” first-year depreciation deduction. For 2013, you can write off up to 50% of the cost of a qualified asset used in your business.
Do you need information about other tax deductions not mentioned here? Please give us a call for the latest details.