Phoenix Accounting Firm | Tax Extenders Bill
Congress is finally looking like they are going to address the many tax cuts and credits that expired at the end of 2013. The bill known as HR 5771, or the tax extenders bill, has already passed the house and is just waiting for the expected senate approval over the next few days. Although they aren’t doing anything about 2015 and forward, reinstating these tax benefits is a huge deal for many individuals and businesses.
For individuals, they can look forward to the following tax deductions and benefits to be reinstated:
- above the line deduction for expenses paid by elementary and secondary school teachers
- exclusion of imputed income from the discharge of indebtedness for a principal residence
- equalization of the tax exclusion for employer-provided commuter transit and parking benefits
- deduction of mortgage insurance premiums;the tax deduction of state and local general sales taxes in lieu of state and local income taxes
- deduction of contributions of capital gain real property for conservation purposes
- deduction of qualified tuition and related expenses
- exemption of distributions from individual retirement accounts for charitable purposes
For business, they can look forward to the following deductions and credits to be reinstated:
- accelerated depreciation of certain business property (bonus depreciation)
- increased expensing allowance for business assets, computer software, and qualified real property (i.e., leasehold improvement, restaurant, and retail improvement property) SECTION 179 DEDUCTION
- accelerated depreciation of qualified leasehold improvement, restaurant, and retail improvement property, of motor sports entertainment complexes, and of business property on Indian reservations
- tax credit for differential wage payments to employees who are active duty members of the Uniformed Services
- 100% exclusion from gross income of gain from the sale of small business stock
- the reduction of the recognition period for the built-in gains of S corporations
These are just the most commonly used and relevent to small businesses and individuals. If you would like to read more about the bill, you can visit www.congress.gov/bill/113th-congress/house-bill/5771. You can also contact us at Dusseau & Makris PC, your Phoenix CPA firm, for more information or to find out if you’re going to be affected by this bill.