It’s finally official—President Barack Obama signed H.R. 5771, The Tax Increase Prevention Act Friday, December 19, 2014.

Businesses will enjoy the one-year extension of the research and development credit and bonus depreciation

Business Tax Provisions:

1. The credits for expenses related to research & development activities, for providing low-income housing structures and for businesses that employ active duty service members.
2. The Work Opportunity tax credit, which is equal to 40% of a portion of the first-year wages paid to members of targeted groups.
3. The accelerated depreciation deduction, which allows companies to deduct 50% of the cost of a qualified asset in the year it is acquired.
4. The increased first-year deduction under Section 179 - up to $500,000 - for qualified assets placed in service during the year.
5. The exclusion of 100% of the gain on qualified small business stock is extended to include stock acquired in 2014 and held for more than five years.  This exclusion is scheduled to revert to 50% for qualified stock acquired after 2014.

Individual taxpayers will equally enjoy the list of 50-plus tax extenders means money in your pocket come tax day next April.

There’s tax relief for teachers, commuters, home owners who go green, and more. This one-year extension of the laws, which expired on December 31, 2013, is good through December 31, 2014. For the new year, 2015, we start the uncertainty all over again...

These are the major individual tax extenders good through 12/31/2014:

1. The deduction for state and local sales taxes. The option to deduct state and local sales taxes instead of deducting state and local income taxes.
2. Above-the-line deduction of up to $4,000 for higher education expenses.
3. A $250 above-the-line deduction for school teachers for supplies.
4. Parity for employer-provided mass transit and parking benefits ($250 a month, up from $130 a month). Transit commuters who run all their commuting costs through their employer’s transit plan should get a retroactive true up—a potential $576 extra tax savings for 2014.
5. The ability to exclude up to $2 million in discharge of residential mortgage indebtedness from gross income.
6. The deduction for mortgage insurance premiums.
7. Energy-efficient home improvements tax credit. This one is listed under “energy” extenders but it affects homeowner’s personal tax return.
8. Tax-free distributions from an Individual Retirement Account for charitable purposes for taxpayers over 70 ½.
9. Enhancements to the rules for donating real property for conservation that encourage farmers, ranchers and other modest-income landowners to increase the pace of land conservation.

Please give us a call to discuss this or any of our other topics with you, so we can address your specific requirements.

DiSabatino CPA
Michael DiSabatino
651 Via Alondra Suite 715
Camarillo, CA 93012
Phone: 805-389-7300
ww.sharpcpa.com

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