Update on the 2014 Tax Increase Prevention Act

Posted on 12.17.14

2014 Tax Increase Prevention Act - Richmond CPA

On Friday, December 19, 2014, the President signed into law: H.R. 5771, the 2014 Tax Increase Prevention Act (TIPA), which extends through 2014 many of the tax provisions that expired at the end of 2013.  There are over 50 business and individual tax deductions affected and we summarized several of the more common tax breaks utilized by our clients.

 

 

Key Business Tax Breaks Extended:

  • Section 179 expenditures were increased to $500,000 for the maximum deduction and $2,000,000 for the qualifying property threshold
  • Bonus First-Year Depreciation Extended.  TIPA extends 50% first-year bonus depreciation for one year so that it applies to qualified property acquired and placed in service before Jan. 1, 2015
  • Accelerated depreciation of qualified leasehold improvement, restaurant, and retail improvement property (15-year straight-line cost recovery)
  • The research tax credit for qualified expenditures
  • The 100% exclusion from gross income of gain from sale of small business stock
  • The low-income housing tax credit rate for newly constructed non-federally subsidized buildings

Key Individual Tax Breaks Extended:

  • Mortgage insurance premiums deductible as qualified residence interest
  • Option to deduct State and local sales taxes instead of State and local income taxes when computing itemized deductions
  • The above-the-line deduction for qualified tuition and related expenses
  • Tax-free distributions to charity from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer per tax year, by taxpayers age 70½ or older
  • The $250 above-the-line deduction for teachers and other school professionals for expenses paid or incurred for books, supplies, equipment, and supplementary material used by the educator in the classroom

If you would like to discuss in more detail, please do not hesitate to reach out to your Keiter representative or contact us: information@keitercpa.com | 804.747.0000.

Related:

2014 Tax Planning Tips for Businesses
2014 Tax Planning Tips for Individuals
CCH Special Report Tax Increase Prevention Act of 2014 | Copyright 2014- Used with permission

 

Sources: Tax Increase Prevention Act of 2014, RIA Checkpoint’s Complete Analysis of the Tax and ERISA Provisions of the Tax Increase Prevention Act of 2014