Take advantage of reinstated tax breaks - FOX 32 News Chicago

Take advantage of reinstated tax breaks

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ATLANTA -

It's March and the fiscal cliff fallout continues.  If you haven't done your taxes yet, or even if you have, there are some retroactive rules you will want to know about.

Some tax breaks expired in 2011, and the fiscal cliff debate put off extending them until we were into January of 2013.  By that time some people had filed their taxes, or were about to, and didn't realize some of those tax breaks had been reinstated.

Enrolled agent and tax preparer Bill Nemeth says the tax breaks reinstated were:

  • $250 educator expense
  • $4,000 tuition and fees
  • Residential energy credit
  • PMI deduction


K-12 teachers can reduce their income $250 for something called the Educator Expense. The IRS assumes you spend that much out of pocket for your classrooms. It's back on the books.   

College students can adjust their income by up to $4,000 for tuition and fees.  

If you insulated your attic or had energy efficient windows installed, the Residential Energy Credit was also reinstated.

PMI is private mortgage insurance. If you haven't put a 20 percent down payment on your home, you are paying a PMI charge in addition to your mortgage.  You can deduct those payments.

Also if you lost your home last year to foreclosure, Nemeth has one last break to look at.

"At the end of 2012, if you lost your primary residence due to foreclosure, you had to pay tax on the forgiven mortgage interest, normally. From 2007 to 2012 they had a provision that it wasn't taxable if it was your main home. They extended that one year to 2013," said Nemeth.

If you have any questions this tax season, see a certified tax preparer, a CPA, an enrolled agent, or a tax laywer.  There are even free tax preparers for low-income families.  Go to the IRS website and find one near you.

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