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They say good things come to those who wait. They also say he who hesitates is lost. But when it comes to half a dozen juicy tax breaks, it's the second "they" you should listen to, because he who waits until Jan. 1, 2012, to take advantage of them will be out of luck.
Here are six tax deductions and credits that will expire at year's end -- unless Congress extends them.
1. Energy-Efficient Home Upgrades
Making energy-saving improvements to your home not only cuts down on heating and cooling costs, it also earns you a tax credit. For example, if you add extra insulation in your attic, replace drafty old windows with modern thermal-pane models, or install an energy-efficient heater or air conditioner, you're eligible for a tax credit of 10% of the cost, up to $500. You don't have to attach the manufacturer's certification that the property meets the requirements for the credit to your tax return, but you must maintain records that establish your entitlement. However, if you've claimed this credit for upgrades in past years, you can't do it again: It's a one-time deal.
2. Higher Education Expenses
The above-the-line deduction of up to $4,000 for qualified higher education expenses won't be available after 2011, so you might want to consider prepaying eligible expenses for 2012 if you haven't already reached the cap for this year. Generally, the deduction applies to tuition and fees paid in connection with enrollment at an institution of higher education during 2011 or the first three months of 2012. The maximum deduction is available to taxpayers with adjusted gross incomes of up to $65,000 for singles and $130,000 for joint filers. A deduction of $2,000 is allowed for singles with adjusted gross incomes of up to $80,000, or joint filers with adjusted gross incomes up to $160,000.
3. Adoption Help
The Adoption Credit and Adoption Assistance Program lets adoptive parents claim a credit against their federal tax of up to $13,360 for "qualified adoption expenses" for each adopted child. If an employer pays the expenses, adoptive parents may be able to exclude up to $13,360 from their gross incomes. Both the credit and the exclusion are reduced (phased out) if parents' income exceeds certain limits, says Gail Rosen, a certified public accountant with Gail Rosen CPA. Though new access to the credit expires when the program ends on Jan. 1, the rules allowed the credit to be carried forward over five years, and Rosen doesn't see anything to would indicate that will change.
4. Sales Tax
read more Beat the Clock on These 6 Soon-to-Vanish Tax Breaks - DailyFinance
Here are six tax deductions and credits that will expire at year's end -- unless Congress extends them.
1. Energy-Efficient Home Upgrades
Making energy-saving improvements to your home not only cuts down on heating and cooling costs, it also earns you a tax credit. For example, if you add extra insulation in your attic, replace drafty old windows with modern thermal-pane models, or install an energy-efficient heater or air conditioner, you're eligible for a tax credit of 10% of the cost, up to $500. You don't have to attach the manufacturer's certification that the property meets the requirements for the credit to your tax return, but you must maintain records that establish your entitlement. However, if you've claimed this credit for upgrades in past years, you can't do it again: It's a one-time deal.
2. Higher Education Expenses
The above-the-line deduction of up to $4,000 for qualified higher education expenses won't be available after 2011, so you might want to consider prepaying eligible expenses for 2012 if you haven't already reached the cap for this year. Generally, the deduction applies to tuition and fees paid in connection with enrollment at an institution of higher education during 2011 or the first three months of 2012. The maximum deduction is available to taxpayers with adjusted gross incomes of up to $65,000 for singles and $130,000 for joint filers. A deduction of $2,000 is allowed for singles with adjusted gross incomes of up to $80,000, or joint filers with adjusted gross incomes up to $160,000.
3. Adoption Help
The Adoption Credit and Adoption Assistance Program lets adoptive parents claim a credit against their federal tax of up to $13,360 for "qualified adoption expenses" for each adopted child. If an employer pays the expenses, adoptive parents may be able to exclude up to $13,360 from their gross incomes. Both the credit and the exclusion are reduced (phased out) if parents' income exceeds certain limits, says Gail Rosen, a certified public accountant with Gail Rosen CPA. Though new access to the credit expires when the program ends on Jan. 1, the rules allowed the credit to be carried forward over five years, and Rosen doesn't see anything to would indicate that will change.
4. Sales Tax
read more Beat the Clock on These 6 Soon-to-Vanish Tax Breaks - DailyFinance
