11 Mar Watch Out for These Expiring Tax Deductions in 2016
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- A few deductions will expire at the end of this year, so it’s important to act now to take advantage of them in the remaining months of 2016 and to adjust your plans for 2017 if you’re depending on using them.
- Did you pay college costs during the year? A deduction for tuition and expenses paid for yourself, your spouse or a dependent can be used on your 2016 return, but it won’t apply in 2017. We can offer advice on other options, including a valuable education credit, the American Opportunity Tax Credit, which is permanent.
- Planning a home purchase soon? Private mortgage insurance (PMI), the amount you typically pay when your down payment is below 20%, will only be deductible through the end of 2016.
- If you were involved in a foreclosure, short sale or loan modification, you can exclude up to $2 million in forgiven debt from your taxable income, but only through this year.
- The Residential Energy Efficient Property Credit still applies for installing certain energy efficient property as photovoltaic panels, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pumps. A credit is available for these expenditures up to a certain percentage. These improvements must be made to your home before the end of 2016.