Tax Tip of the Week | No. 284 | Tax Extenders Passed

Tax Tip of the Week | Jan 7, 2015 | No. 284 | Tax Extenders PassedIn case you didn't hear...

Just before Christmas, Congress finally passed the “tax extenders” for 2014. These “extenders” refer to a set of about 60 tax incentives that are scheduled to lapse after a certain number of years.  We have seen Congress act at the last minute three times in the past:  October 2008, December 2010 and January 2013.Perhaps Finance Chairman Ron Wyden (D-, Oregon) said it best: “Congress is turning in its tax homework eleven-and-a-half months late and expects to earn full credit”.In any event, we now know for sure that we can use the following popular tax breaks when preparing your 2014 tax return:-    Section 179-businesses can elect to immediately deduct up to $500,000 for equipment purchases vs. depreciating over a number of years-    Bonus Depreciation- allows businesses to claim an additional 50% first year depreciation on new equipment purchases-    Teachers Classroom Expense Deduction- $250 maximum-    Mortgage Insurance Premium Deduction (PMI)-    Higher Education Deduction- $4,000 maximum-    State and Local Sales Tax Deduction-in lieu of income tax deduction-    Mortgage Debt Exclusion-if primary home is foreclosed-    Charitable Distributions from IRAs –if over 70.5 years old-    Charitable Deduction if making a Conservation Easement-    Research Tax Credit-    Work Opportunity Tax Credit-    100% Exclusion for Gain on Qualified Small Business StockThese are only some of the most commonly used tax incentives that were extended for 2014.  Also note that all of these incentives are subject to various rules and regulations.Also be aware that Congress granted these extensions for 2014 only! Hopefully, we will not have to wait so long to know what the 2015 tax code will look like.We’ll keep you posted. You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTW...until next week.