Tax Deductions Disappearing After 2013

For complete incomprehensibility, there's really nothing quite like the US tax code. Entire offices full of trained experts have been known to make glaring errors simply because the list of allowable tax deductions is not only huge and complicated but also consistently changing from one year to the next. In 2014, for example, a number of deductions that people have come to rely on will be disappearing. Which ones, exactly, and what it means for the clients who come to you asking for help, are the subjects of this guide.

The US federal tax code has the delightful twin quirks of being longer than most encyclopedias and of undergoing massive sea changes every year to keep accounting professionals on their toes. Filing taxes is only a part of the accountant's job. For much of the rest of the year, you'll be on call to help your clients understand what tax deductions they're eligible for, which ones they're not, and the consequences of writing off their pets as dependents.

While pets have never actually merited tax deductions, the tax deductions that actually are in the code can be nearly as specific. One such tax deduction that will be lost after 2013 is the Educator's Expense tax deduction. This is just what it sounds like: a tax deduction that's specifically for teachers who have to kick in for classroom-related expenses that aren't covered by the tax money the school receives. Another education-related tax deduction that's slated to go is the Tuition and Fees Expense deduction, which is expected to negatively impact college enrollment after 2014.

Some tax deductions, while they'll no doubt be sorely missed by some, were never intended to be a permanent fixture in the tax code. Such is the Special (Bonus) Depreciation deduction and also the Personal Energy Property Credit, both of which were intended to incentivize certain taxpayer activities for a limited time.

Fiscal 2014 will also see off some old friends that were always thought to be load-bearing structures in the tax code. In this category are the Mortgage Insurance Premium deduction, the Qualified Charitable Contributions deduction, and the State and Local Sales Tax deduction.

The elimination of those last two tax deductions has raised hackles among some. It's possible to argue that the deduction for paying your state and local taxes is a way of avoiding what is, in effect, double taxation. While it might not rise to the level of an official court challenge, this issue just goes to show that the tax code, while it may be written in black and white, certainly contains many shades of gray—certainly more than fifty—and will be subject to interpretation as the new year dawns and a new season for filing taxes begins.

(Photo courtesy Vichaya Kiatying-Angsulee / freedigitalphotos.net)