In the News: Tax Extenders Bill Passes

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Many tax changes impact 2015

Congress has passed legislation that will impact your 2015 tax bill. Most of these tax laws expired in 2014 and created uncertainty during 2015. While passing legislation that impacts a tax year that is all but over seems unreasonable, here are some of the popular tax-saving changes worth noting.

Charitable Contributions from your IRA. If you are 70 ½ years old and older, you can make direct contributions from your IRA to your favorite charity. This law expired in 2014, but now is made permanent retroactively to the beginning of 2015. The tax benefit creates a “tax-free” distribution from your IRA for up to $100,000. But act NOW if you want to take advantage of this law in 2015.

Extension status: Now permanent

Qualified Tuition & Fees. The new law extends the deduction for Tuition & Fees for post-secondary expenses into 2015 and 2016. Remember to include this provision when evaluating your educational tax breaks.

Extension status: Still temporary, available through 2016.

State and local Sales Tax Deduction. The option to use sales taxes in lieu of state income taxes as an itemized deduction is now a permanent part of the tax code. So if you have large purchases that make this option viable for you, save the receipts.

Extension status: Now permanent

Teacher’s Classroom expense deduction. You can now take full advantage of this $250 deduction on your tax return for 2015 and well into the future. This popular deduction for qualified elementary and secondary school teachers can be taken even if you do not itemize your deductions. If you have not already done so, please document your out-of-pocket classroom expenses for the year.

Extension Status: Now permanent

Depreciation and Capital expense provisions. 50% bonus depreciation and expanded Section 179 expensing are also available for 2015. While little time is left during 2015 to take advantage of these previously expired tax laws, as long as the assets are placed in service during 2015 you can use them. The expanded Section 179 provision is $500,000 in qualified assets with a $2 million dollar investment limit. Both provisions are available in 2016 as well.

Extension Status: Expanded Section 179 is now permanent. Various Bonus Deprecation provisions are available through 2019

As of this writing, the bill is being forwarded for final presidential signature. The final bill contains many more tax provisions. Those outlined here are the more common provisions may require your immediate attention.