More than 50 individual and business tax deductions and credits were signed into law in December 2014 as part of “The Tax Increase Prevention Act”.
These “extender” deductions and credits were extended retroactively from December 31, 2013 to December 31, 2014.
The extended legislation most likely to impact you are:
Individuals
- The $250 tax deduction of classroom expenses for elementary and secondary teachers.
- The deduction of mortgage insurance premiums (PMI).
- The exclusion of up to $2 million of discharged principal residence indebtedness from gross income. Taxpayers may still have to pay tax on other forms of debt forgiveness.
- The option to deduct state and local general sales taxes in lieu of state/local income taxes.
- The deduction of qualified tuition and related expenses.
- The tax provision that allows a tax-free IRA distribution of up to $100,000 from an IRA directly to a charitable organization.
- The tax credit for residential energy efficiency improvements.
- The tax credit for geothermal unit installation and wind/biomass energy
Businesses
- Accelerated 50% Bonus Depreciation on new asset purchases.
- Section 179 Depreciation increased to $500,000, with phaseout beginning at $2 Million of asset purchases.
- The research tax credit.
- The Work Opportunity Tax Credit.
Please note that this extended legislation is only through December 31, 2014. While these deductions and credits may get extended again during 2015, they also run the risk of not getting passed.
Call us at if you want to discuss how this bill impacts both your 2014 tax return and your 2015 tax planning. Request a complimentary accounting consultation or contact us at (616) 642-9467.
