President Signed Tax Extenders, Penalties, and ABLE Act Bill
On December 19, the President signed tax extenders, penalties and the ABLE Act Bill — the Tax Increase Prevention Act of 2014 (HR 5771), which extends most of the expiring provisions through December 31, 2014. Here is a list of the extensions:
Individual provisions
- State and local sales tax deduction
- $250 teachers’ deduction for classroom supplies
- Debt discharge on principal residence
- Mortgage insurance premium deduction
- IRA-to-charity exclusion
- Increased excludable employer-provided mass transit and parking benefits
- Liberalized rules for qualified conservation contributions
- Above-line deduction for qualified tuition expenses
Business provisions
- Enhanced IRC §179 with a limit of $500,000
- 50% bonus depreciation (includes $8,000 boost to first-year depreciation on qualifying vehicles)
- 15-year depreciation on qualified leasehold and retail improvements and restaurant property
- 7-year depreciation for motorsport racetrack facilities
- 5-year period for built-in gains tax
- Exclusion of 100% of gain on sale of small business stock
- Expensing election for costs of film and television production
- Classification of certain race horses as three-year property
- Accelerated depreciation for business property on an Indian reservation
- Research Tax Credit
- Work Opportunity Tax Credit
- Enhanced charitable deduction for contributions of food inventory
Energy provisions
- Nonbusiness energy property credit
- New energy-efficient home credit
- Energy efficient commercial buildings deduction
- Alternate fuels and mixtures excise tax credit
The following provisions were not extended:
- Health coverage tax credit for displaced workers and retirees
- Plug-in credit for two- and three-wheeled vehicles
- Energy efficient appliance credit
- New York Liberty Zone tax-exempt bond financing
- Partial expensing of refinery equipment
The bill also will adjust, for inflation, failure-to-file and failure-to-pay penalties for tax returns required to be filed after December 31, 2014.
The law also includes the ABLE Act, which provides a new type of tax-advantaged savings plan for disabled individuals. (New IRC §529A) They are closely modeled after IRC §529 Qualified Tuition Plans.
Be aware that these items were only extended through 2014; we still do not know what will be allowed in 2015.
If you have any questions if any of this will affect you, give Bressler & Company a call at 559.924.1225.
