There are a Number of Tax Deductions and Credits that are Expiring at Year's
And with the federal deficit issues, there's odds that they will not be extended. So, if you would like to benefit from them, you will need to act prior to Jan. 1, 2012.
Credit for Adoption
A credit on your taxes for the costs relating to an adoption (court costs, adoption fees, travel,, attorney fees, etc.) has been around for many years. Although, there is a enhanced adoption credit can be taken for adoptions completed prior to 2012. The credit can be as much as $13,360 of total adoption expenses. For 2011, it is a credit which is nonrefundable, meaning you are qualified for this deduction even if it runs more than the entire amount of your tax liability for 2011. This allows you to qualify for a refund on your taxes although you had no withholding for federal income tax.
Deduction for Education Expenses
For certain education expenses, a deduction for as much as $4,000 is offered for 2011. Any or a portion of the expense you pay may be for classes that start in 2012. But you must pay for them during 2011, because this deduction runs out at the conclusion of this year. You cannot take the deduction if your adjusted modified gross income exceeds $80,000, or ($160,000 when filing a return jointly). Also, it cannot be taken if you claim any tax credits for education.
Deduction for Home energy credit
First off, any homeowner can claim an energy credit up to $500. You may qualify for this credit if during 2011 you purchase solar panels for water heating, generate electricity or install geothermal heat pump, wind energy equipment, or certain kinds of fuel cells for creating electricity. The credit can run as much as 30 percent of your total expenditures, up to the maximum $500 limit. This credit will not available for acquisitions in 2012.
Deduction for Mortgage insurance premiums
If you itemize your deductions, you can deduct any
premiums paid for mortgage insurance, exactly the same as for mortgage interest. Although, this deduction gets phased out when your annual income goes over certain levels. In order to qualify for a full deduction, a single taxpayer or a couple's adjusted gross income must not exceed $100,000. The deduction is wiped out completely if adjusted gross income exceeds $109,000.
This deduction, was first enacted in 2007, is expiring at the conclusion of 2011. Thus, your payments may be deducted only if they are paid during 2011; any payments after 2011 are not deductible.
Deduction for Sales taxes
If you take itemized deductions, you can write off either your local taxes and state or sales taxes you paid over the year. This is a deduction that is a blessing for people who reside in states with low or no income taxes. Although, a deduction for use and sales taxes in place of state income tax is expiring at the conclusion of 2011. To take full advantage of this deduction, you must make any major purchases prior to the end of this year.
Nov 29, 2011