BHT&D Certified Public Accountants Blog

The Expire Act Extends Tax Provisions that Expired at the End of 2013

Posted by Dwayne Houghton on Wed, Apr 30, 2014 @ 09:00 AM

expire act 2014There were many tax provisions that expired as of December 31, 2013. Is Congress taking any action to extend these provisions?

On April 1, the Senate Finance Committee Chairman Ron Wyden and member Orrin Hatch introduced the Expiring Provisions Improvement Reform and Efficiency Act (EXPIRE Act). On April 3, 2014 the Senate Finance Committee reported out of committee the marked up version of the EXPIRE Act.

The EXPIRE Act will extend, for two years in most cases, many of the tax provisions that expired as of December 31, 2013. Some of the more common business related provisions extended include the research and development credit, work opportunity credit, 15 year straight-line depreciation for qualified leasehold improvements, 50% bonus depreciation, Sec 179 expensing election of $500,000 and 100% gain exclusion for qualified small business stock.

The EXPIRE Act will also extend for two years some individual tax provisions. This includes $250 above the line deduction for teacher related expenses, exclusion of discharge of principal residence indebtedness from gross income, deduction for mortgage insurance premiums as interest expense, deduction for state and local sales tax, above the line deduction for qualified tuition and related expenses and tax-free distributions from IRA accounts for taxpayers age 70 – ½ or older.

The EXPIRE Act also extends several energy related provision in the tax law. These are related to renewable energy sources including biodiesel, nonbusiness energy property and energy efficient commercial properties.

The EXPIRE Act did not renew or extend the credit for health insurance cost, credit for energy efficient appliances along with other less common provisions.

The EXPIRE Act is in the early stages of the complete process a bill goes through to be enacted in to law. It is likely that provisions can be added, deleted or modified for their current state before the bill is ultimately signed into law. The good news is that Congress is signaling their intent to take action to extend many popular provisions that expired at the end of 2013. They are further indicating that these changes will likely be retroactive to January 1, 2014.

If you have any questions about this topic or need assistance, please request a complimentary accounting consultation with one of our CPAs or contact us at (616) 642-9467.

Tags: Expire Act, Tax Provisions, Small Business Accounting