NEW YORK - Individual and small businesses are set to lose a slew of tax breaks at the end of the year - including deductions for mortgage insurance, educator’s expenses, tuition, energy efficiency, and business property. A new Thomson Reuters Checkpoint report created to help tax professionals advise their clients highlights 23 federal tax provisions scheduled to expire on Dec. 31 and, in some cases, replacement provisions scheduled to take effect on Jan. 1.

Tax breaks set to expire at the end of the year include:

• The deduction of up to $250 for K-12 teachers’ out-of-pocket expenses.
• The above-the-line deduction for tuition and fees for qualified higher education expenses.
• The ability to exclude up to $2 million in cancellation-of-debt income in connection with a qualified principal residence.
• The deduction of mortgage insurance premiums by homeowners.
• The Personal Energy Property Credit, a tax credit (with a $500 lifetime cap) for qualified residential energy efficiency projects.
• The Qualified Small Business Stock gain exclusion. Qualified Small Business Stock acquired after Dec. 31 will qualify for a 50-percent gain exclusion, not the 100-percent exclusion currently allowed.
• Beginning in 2014, taxpayers can no longer deduct up to $250,000 of qualified leasehold, restaurant and retail property improvements.

The entire list of expiring tax provisions is available at https://tax.thomsonreuters.com/wp-content/pdf/checkpoint/NTA-expiring tax laws2.pdf. In recent years, tax planning has been complicated in that many laws have been enacted only temporarily and then extended – repeatedly in some cases. The American Taxpayer Relief Act of 2012 partially fixed this by making a number of these provisions permanent - but not all of them.

“If these provisions expire as scheduled, it may be advantageous to take action in 2013 - while the deductions are still in effect,” said Anthony DeChellis, senior tax analyst at Thomson Reuters. “Of course, Congress can still extend or change provisions, which creates a challenge for tax advisors and CPAs engaged in year-end tax planning. The best strategy is to remain flexible, keep clients informed, and be prepared to act quickly once it’s certain whether a provision will expire.”

Thomson Reuters Checkpoint is the industry-leading and award-winning online service that provides research, news, analysis, and productivity tools to tax, audit, accounting, legal, trade, and finance professionals. For information on subscribing to Checkpoint content, visit https://tax.thomsonreuters.com/products/brands/checkpoint/contact.

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