IRA charitable deduction, 56 other tax goodies set to expire Dec. 31

Federal deductions for individuals for state and local taxes, as well as R&D credits for businesses also on list

Nov 15, 2013 @ 2:40 pm

By Mark Schoeff Jr.

New Year's Eve this year won't be nearly as dramatic for tax policy as last year, but dozens of deductions — including a client favorite for charitable donations — are set to expire when the ball drops in December.

As of the beginning of the year, 57 so-called tax extenders will no longer exist, including federal tax deductions for individuals for state and local taxes and tax credits for businesses for research and development. Another provision that will bite the dust is one that allows tax-free distributions from individual retirement accounts for charitable contributions.

All the extenders can be applied to 2013 tax returns that are due April 15. But next year, the tax breaks won't be available unless Congress extends them once again in a process that has been repeated regularly to maintain the provisions.

The situation this time around is less urgent than it was during last year's fiscal cliff deliberations. At that time, the extenders hadn't been renewed for this year and weren't available for the tax-filing season until Congress extended them in the fiscal cliff legislation on Jan. 1.

Lawmakers renewed them retroactively for 2012 through this year.

Now questions are arising again about their availability for next year.

“Our major concern is the uncertainty of the tax code,” Jeff Porter, chairman of the tax executive committee of the American Institute of Certified Public Accountants, said during a media conference call Friday.

The group is pressing Congress to renew the tax extenders to help ease tax planning for companies and individuals.

“How can a business person make a decision to expand a business when they don't know what the state of the law is?" said Ed Karl, AICPA vice president for taxation.

The limbo surrounding IRA charitable contributions is already generating questions for Tim Steffen, senior vice president and director of financial planning at Robert W. Baird & Co. Inc.

“We continue to get a lot of clients asking about that,” he said.

“That has a lot of appeal,” Mr. Steffen said. “Taxpayers want to get whatever little edge they can get.”

It isn't clear when Congress will act on the tax extenders. Stand-alone legislation hasn't yet been proposed.

They might be included in bigger tax packages next year.

“These things, in all likelihood, will get extended,” Mr. Steffen said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Here's how we came up with our list of undiscovered talent in mutual funds

Senior columnist John Waggoner talks with assistant managing editor Susan Kelly about how hard work, curiosity and passion landed some fund managers on our list.

Latest news & opinion

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

SEC advice rule seeks to tighten reins on brokers

The proposed rule puts new restrictions on brokers, but it is still unclear how strongly the SEC is clamping down.

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

SEC advice proposal unveiling: Here's what to expect

Chairman Jay Clayton will initiate momentous action Wednesday, as the commission meets to debate a rule on broker and adviser standards.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print