In December 2014, Congress passed a tax extender bill that was then signed by the President, which extended tax write-off provisions for tax filing year 2014. Previous to this Bill, these provisions were scheduled to expire on 12/31/13.
Some of the extensions that were restored which may benefit you include:
- IRC §179 expensing of business purchased equipment and/or software from $25,000 to the previous $500,000 value and raising the purchase amount limit from $200,000 to $2,000,000.
- Current bonus depreciation limits.
- Special rule for contributions of capital gain real property made for conservation purposes (easements).
- Research and development credit of 20% of R&D expenditures.
- Renewable energy credits for businesses.
- Exclusion of mortgage debt cancellation or forgiveness for homeowner’s primary residence.
- Higher education tuition and fees tax deduction for adjusted gross income below $80,000.
- Deduction of state and local sales taxes for individuals in states with no income tax.
- Teacher credit of $250 for books and supplies above the line deduction.
- Tax free distributions from individual retirement plans to charities.
- Enhanced deduction for contribution of food inventory to charity.
- Continuation of public transit tax-free accounts for employers.
- Allows exception to taxing certain offshore businesses if the businesses generate the income through financing.
- A work opportunity tax credit encouraging the hiring of welfare recipients.
- 15 year cost recovery for retail, restaurants and leaseholds.
- Qualified small business stock exclusion of 100%.
- Deduction for mortgage insurance.
- Tax credit for differential wage payments to active military.
- Basis adjustment rule for stock of an S-corporation making charitable contributions of property.
- Reduction in the recognition period for the built-in gains of S-corporations.
We will continue to monitor the situation and keep you up-to-date on any additional tax changes in Congress.