Benefit from Tax Deductions in 2011 Before They Expire

Benefit from Tax Deductions in 2011 Before They Expire

At the end of this year, there are several tax deductions that are set to expire.   The government is trying to close the federal deficit so they may not extend these tax benefits.  Take advantage of them while you still can, before January 1, 2012.

Mortgage Insurance Premium Deduction

This deduction will expire by the end of 2011, so you’ll only be able to write off the mortgage insurance payments you make during the year 2011.  To qualify for the full deduction, the adjusted gross income of the couple or single filing must be below $100,000 per year.  Partial deductions are allowed for incomes up to $109,000. 

Education Expenses Deduction

You can deduct up to $4000 in education expenses for 2011.  You can even include payments in 2011 that are for classes in 2012.  This deduction also expires at the end of 2011 and is only available to those with an adjusted gross income of $80,000 or less ($160,000 for a joint return).  It’s not available if you’ve qualified for an education tax credit.

Home Energy Credit

Any homeowner can get this credit, which is up to 30% of the price of solar panels for heating water, wind energy equipment, etc. up to $500 max.  You cannot get this credit for any purchases made in 2012.

Adoption Credit

A tax credit for adoption expenses (adoption fees, court costs, attorney fees, travel, etc.) has been available for many years. However, an enhanced adoption credit is available for adoptions finalized before 2012. The credit is up to $13,360 of adoption expenses. For 2011, this is a nonrefundable credit, meaning you qualify for it even if it exceeds the amount of your 2011 tax liability. This means that you could qualify for a tax refund even if you did not have federal income tax withheld.

Please consult a tax accountant for specific help with your finances if you have any questions.