Tax Deductions Expiring in 2013

As 2013 winds down, many tax deductions will be coming to an end. Before the year ends, there are a few tax deductions that can make your 2013 tax bill a little lighter. Although the new year will begin in just a few days, there is still time to take the benefit of those deductions and save some tax money. 

Deduction on teacher’s classroom expenses will expire in 2013. This tax deduction of $250 on school supplies and classroom supplies can still save you taxes if you buy school supplies by the end of the year. Instead of buying stock at the start of the next year, making large purchases this year can help reduce taxes.

Withdrawing funds from the IRA if you are 70 and a half, or older, and giving up to $100,000 to charity saves you from taxes at the time of withdrawal until the year ends. The deduction was created to encourage charitable contributions, but this deduction is coming to an end. In 2014, there is no escape from paying taxes on withdrawals after retirement whether you give to charity or not.

Credit for certain two and three-wheel electric vehicles is also expiring in 2013. There is another tax credit of $7,500 for four-wheel electric vehicles that will continue in 2014. 

State sales tax deduction in states where taxpayers deduct state sales tax and not state income tax will expire this year. It is a good idea to save taxes on purchases before the year ends. If you have planned to buy a vehicle in January, 2014, it is better to buy it now so that you can deduct taxes on it. Big purchases can lighten your 2013 tax bill considerably.

Mortgage insurance deduction will no longer be available in 2014. In 2013, you can treat amounts you paid during the year for qualified mortgage insurance as home mortgage interest.

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