Top 5 New Income Tax Deductions for 2013
Cancellation of mortgage debt on a principal residence
Think the housing crisis is getting better? Just ask the folks on the selling end of a short sale and see what their answer is.
Short sales are getting a lot of homeowners out from under water and taking a lot of homes off the banks' hands, but that escape route almost came at a cost. Thanks to the fiscal cliff fix, if a lender forgave homeowners' mortgage debt through 2013 - basically said they were off the hook for whatever the selling price of the house didn't cover -- you don't have to report that amount as income.
A short sale still isn't such a great time for the folks losing their home, but at least they're not suffering yet another blow come tax time.
Donating land for conservation
So what if you don't have a lot of liquid assets around, but you have a whole valley full of land? If you parted with some of it in 2012 to prevent those acres from becoming yet another discount-store-anchored strip mall, there's a chance you can write it off.
The good news is that this once-temporary benefit that gives couples a $1,000 credit for every dependent under age 17 is now permanent. The bad news? The more you make, the less likely you are to get it.
Married couples can get the full benefit only if they make $110,000 in modified adjusted gross income a year or less. For single taxpayers, that threshold falls to $75,000. For every $1,000 above those amounts, the child credit drops $50. The new law extends the credit permanently. You can get a $1,000 credit for each dependent child under 17. The catch: The credit starts to phase out for married couples with $110,000 of modified adjusted gross income; and at $75,000 for single taxpayers. The credit is reduced by $50 for each $1,000 of income above the threshold amount. -- Written by Jason Notte in Portland, Ore. >To contact the writer of this article, click here: Jason Notte. >To follow the writer on Twitter, go to http://twitter.com/notteham. >To submit a news tip, send an email to: email@example.com.
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