As you begin to think about tax planning for 2014, remember that a number of deductions are phased out this year.
Due to permanent changes and modifications made by the 2012 Taxpayer Relief Act the following tax incentives expired at the end of 2013. Unless extended retroactively by Congress, they will not be available for 2014:
- Above-the-line deduction for educator expenses
- Above-the-line deduction for qualified tuition and related expenses
- Election to deduct state and local general sales taxes in lieu of state and local income taxes
- Mortgage insurance premium deduction
- Tax-free IRA distributions to charity
You should also keep in mind that as of 2013 medical expenses must exceed 10% of your adjusted gross income. That is up from 7.5% in 2012.