Over 50 tax provisions included in previously enacted legislation are set to expire at the end of 2013. Although Congress could pass legislation continuing some or all of the expiring tax provisions as a way to continue economic growth and consumer spending, there are no guarantees they will do so. If no action is taken by Congress, these tax provisions will end. Have you considered the ramifications of the expiring tax provisions as part of your year-end tax planning?

The expiring tax provisions can be grouped into five general classifications as follows:

1. Individual provisions
2. Business provisions
3. Charitable provisions
4. Energy provisions
5. Community assistance provisions

Individual provisions set to expire include:

• Deduction for certain expenses of elementary and secondary school teachers
• Itemized deduction for state and local sales taxes
• Deduction for qualified tuition and expenses
• Itemized deduction for premiums for mortgage insurance
• Credit for health insurance costs

Business provisions set to expire include:

• Tax credit for research and experimentation expenses
• Work Opportunity Tax Credit
• Indian Employment Tax Credit
• 15-year straight-line cost recovery for qualified leasehold, restaurant and retail improvements
• Employer wage credit for activated military reservists
• Special rules for qualified small business stock
• Increase of Section 179 expense to $500,000 for qualifying property
• Bonus depreciation

Charitable provisions set to expire include:

• Enhanced deduction for contributions of food inventory
• Tax-free distributions from IRA accounts to charities
• Basis adjustments to stock of S Corporations making charitable contributions of property
• Specials rules for contributions of capital gain real property for conservation purposes

Energy provisions set to expire include:

• Credit for construction of energy efficient new homes
• Deduction for energy efficient commercial buildings
• Credit for energy efficient appliances
• Credit for non-business energy property
• Incentives for alternative fuels, biodiesel and renewable diesel
• Credits for elective drive motorcycles and three-wheeled vehicles
• Credit and special depreciation for second generation biofuels

Community assistance provisions set to expire include:

• Tax credit for new markets
• Empowerment zone tax incentives

Now is the time to consider some or all of these expiring tax provisions in your year-end tax planning. Contact Flexible Accounting Services of the Triangle today and let us assist you with your tax planning needs before the year and the preceding advantages slip away.