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Tax law changes update, part 2: home offices, mileage and more

In part one of this post, we began discussing some of the federal tax law changes that are scheduled to take effect this year.

We noted, for example, that deductions on income taxes for medical expenses are expected to be available to more taxpayers this year.

In this part of the post, let's discuss other tax law changes that are already in place or will take effect soon unless Congress makes more changes to the code.

One change that will make compliance easier for many taxpayers is the availability of a simplified way to calculate the home-office tax deduction. The old calculation involved often-convoluted calculations concerning the pro-rating of various housing expenses.

That calculation remains on the books for taxpayers who choose to use it. But there is also a new, streamlined method to take the deduction. The new method is simply a matter of multiplying the number of square feet (up to a certain limit) by a certain amount.

Another notable change in tax law will not take effect until next year. As we discussed in our January 2 post, Congress has not acted to renew a 2007 law that allows an income tax exemption for forgiven mortgage debt following foreclosures, short sales or a mortgage modification.

Unless Congress takes action to extend the exemption, the tax-filing year that is starting now will be the last one where the exemption is available.

Finally, let us touch on an often-amended tax provision that affects many business travelers, namely the reimbursement rate for mileage. The rate has gone up one cent this year, from 55.5 cents per mile to 56.5.

Source: U.S. News & world Report, "6 Critical Changes to Note When Filing Your 2013 Taxes," Teresa Mears, Jan. 21, 2014

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