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Quick Tip: Three Tax Breaks that May Totally Disappear for 2006

If you used these three tax deductions in the past and are expecting to use them in 2006, you may be in for an unpleasant surprise.

Over the past few years, several new deductions were created that officially expired in 2006. These breaks are:

1.) Deduction for tuition

2.) Deduction for teachers who buy classroom materials

3.) Deduction for state and local sales taxes

All three of these deductions were expected to at least be extended, but were part of the failed “trifecta bill,” that was packaged with the estate tax cut and minimum wage hike.

At this point, there is still hope as a lame duck session of Congress could move forward and extend these breaks. But this may create its own set of problems as these deductions could be passed after the IRS prints the 2006 tax forms. So even if this legislation is passed, you may have to wait until the updated form is printed and available and/or updated in your tax software program. So if you are eligible for these tax breaks if they are extended, I would kept abreast of what goes on over the next few months prior to filing your tax return by going to the IRS website periodically.

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