UPDATE: Tax Increase Prevention Act of 2014 Signed Into Law

UPDATE: Tax Increase Prevention Act of 2014 Signed Into Law

As promised in our last post, we finally have an update to report in regard to the favorable tax provisions that expired at the end of 2013! As of Friday, December 19th, the Tax Increase Prevention Act of 2014 retroactively extends the tax provisions that were set to expire on December 31, 2013 to be effective through December 31, 2014.

While the year is nearly over, there is still time to take advantage of some of these provisions. In the case of others, you may simply get a tax benefit from behavior or transactions in which you’ve already engaged during 2014. Some of the more common extended provisions are listed below.

For individuals:

·       $250 deduction for classroom expenses for teachers

·       Tuition and fees deduction

·       Exclusion of discharge of principal residence indebtedness from gross income

·       Mortgage insurance premiums’ treatment as qualified residence interest on Schedule A

·       Sales tax deduction on Schedule A

·       Tax-free distributions from individual retirement accounts made directly as a charitable donation for those over 70 ½

·       Exclusion of 100% of gain on qualified small business stock

For business owners:

·       Maximum Section 179 depreciation deduction of $500,000

·       50% Bonus depreciation

·       Research and Development Credit

·       Work Opportunity Credit

·       15-year straight line cost recovery for qualified leasehold, restaurant, and retail improvements

·       Enhanced charitable deduction for contributions of food inventory

Other tax credits:

·       Credit for construction of energy-efficient new homes

·       Credit for energy-efficient appliances

Again, these are just some of the most common provisions that have been extended through 2014. If you have questions or concerns related to your specific tax circumstances, please contact any of the CPAs at ADKF.

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