Tax Increase Prevention Act of 2014

Posted On December 18, 2014
by Gene Schindler
file and suspend for married couples - social security benefit

On December 16th, Congress passed the Tax Increase Prevention Act of 2014. This Bill, which is awaiting the President’s signature, extends over 50 tax provisions that expired 12/31/13 and retroactively reinstates them for a period of one year to cover the 2014 tax year. It is uncertain if these provisions will be extended past 2014, so you may only have until January 1, 2015 to take advantage of some of these tax breaks. Some of the more significant provisions that are extended in the Bill include:

  • Teachers’ ability to deduct up to $250 of out of pocket classroom expenses
  • Exclusion for mortgage debt forgiveness
  • Deduction for mortgage insurance premiums
  • Deduction of state and local sales tax in lieu of state and local income taxes
  • Tuition and fees deduction
  • Tax-exempt distributions from IRA’s for qualified charitable contributions
  • Exclusion of gain from the sale of small business stock
  • Tax credit for research and experimentation
  • Work Opportunity Tax Credit
  • Accelerated depreciation
    • 15 year cost recovery for qualified leasehold improvements
    • Section 179 – Can expense up to $500,000 of qualifying assets in year of acquisition
    • Bonus Depreciation – 50% of basis of qualifying property can be deducted in the first year in addition to regular depreciation taken on the assets
  • Energy Efficiency
    • Tax credit for residential energy efficiency improvements
    • Tax credit for energy efficient new homes
    • Tax deduction for energy efficient commercial buildings

If you have questions about what is in the Tax Increase Prevention Act of 2014 or how it may impact you, please contact your Burke & Schindler Tax Advisor.