During the late hours of Tuesday, December 16, 2014, Congress passed the Tax Increase Prevention Act of 2014. President Obama has indicated that he will sign the bill as soon as it reaches his desk. This bill extends through 2014 many tax incentives that expired on December 31, 2013.
Taxpayers will have to act quickly and may need to revisit year-end tax planning discussions that have already taken place.
Some of the more popular tax extenders affecting individuals and businesses are below.
• Business Tax Extenders:
• Bonus depreciation (50% bonus depreciation on qualified property)
• Enhanced Code Section 179 expensing ($500,000 dollar limit with a $2 million overall investment limit)
• Research Tax Credit
• Work Opportunity Tax Credit
• 100% Exclusion for gain on qualified small business stock
Individual Tax Extenders:
• State and local sales tax deduction
• Higher education deduction
• Teacher’s classroom expense deduction
• Mortgage debt exclusion
• Mortgage insurance premium deduction
• Charitable distributions from IRAs