Late Tuesday, December 16, the Senate passed the tax package, H.R. 5771. This legislation includes the “Tax Increase Prevention Act of 2014,” which was passed by the House on December 3, extends through 2014 over fifty currently expired “extender” provisions. The Act has been sent to the President for his signature and is expected to quickly be signed into law.
Below are a few highlights of the provisions that are included in the Act. For the full summary of extended tax breaks, please click here.
Retroactively Extended Depreciation and Expensing Provisions
- Section 179 – expensing limit increased to $500,000 with phase-out limits increased to $2 million
- 15-year write-off for qualifying leasehold improvements, restaurant buildings and improvements, and retail improvements
- 50% bonus first-year deprecation for qualified property acquired and placed in service before January 1, 2015
Retroactively Extended Individual Tax Breaks
- Above-the-line deductions for higher education expenses and educator’s expenses
- Deductions for state and local sales tax and mortgage insurance premiums
- Exclusion for discharged home mortgage debt
- Allowance of tax-free charitable transfers from a taxpayer’s IRA (up to $100,000 for taxpayers age 70 ½ or older)
Retroactively Extended Business Tax Breaks
- Research credit (the sum of 20% of the excess (if any) of the qualified research expenses for the tax year over a base amount)
- Work opportunity tax credit (applies to eligible veterans and nonveterans who begin work for the employer before January 1, 2015)
Retroactively Extended Energy-Related Tax Breaks
- Nonbusiness energy property credit. For qualified energy property placed in service before 2014, a taxpayer may claim a credit of up to a $500 lifetime limit (with no more than $200 from windows and skylights) for property placed in service after December 31, 2013 and before January 1, 2015.
Because many of these tax breaks and provisions may only apply for the next two weeks (i.e. until Jan. 1, 2015), we encourage you to consider them closely as part of your year-end tax planning strategy.
Should you have any questions, please contact our office at (402) 423-4343. As always, our team of trusted advisors is here to help identify key tax planning strategies to minimize your current and future tax liabilities.