The Extenders expired on December 31, 2014. Yes, Washington, D.C. in its infinite wisdom passed a bill just prior to Christmas break that extended many popular tax incentives (commonly referred to as “Extenders”) for a only few short days. It is now 2015 so what should a taxpayer do?
There is much talk about tax reform which would include making the Extenders permanent (or at least keep them around for 2015!). Keep an eye on these key provisions:
Code Section 179 Expensing Of Property
The very popular §179 which expenses in one year the cost of equipment and other certain property dropped to $25,000 with a $200,000 investment limit. Conventional Wisdom is that a more generous write-off will be passed.
Bonus Depreciation allows taxpayers to claim an additional first year depreciation deduction by allowing an extra percentage deduction of the cost of new equipment and other allowable property.
The key word here is “Bonus” as in not permanent. Bonus depreciation could disappear even though it has been around since 2001.
Many popular tax incentives expired and must await Congressional action!
For individuals these include:
● State and Local Sales Tax Deduction
● Higher Education Deduction
● Charitable Distributions from IRAs
● Teachers’ Classroom Expense Deduction
For businesses these include:
● Research Tax Credit
● Employer Wage Tax Credits
The frustration of trying to do some tax planning for 2015 is understandable. If you are unsure about the status of an Extender that interests you, and how it impacts your decision making process, contact our office. We will be happy to assist you.