ONE YEAR TAX EXTENDERS PACKAGE PASSED IN HOUSE

Brian Wynne, CPA

On Wednesday, the House overwhelmingly passed a bill that will extend, for one year, a package of tax provisions into 2014. Though the year is almost over, these breaks had all previously expired as of December 31, 2013, and under this bill they will be extended through December 31, 2014. There has been considerable debate over the content of this package, and whether to pass a one-year extension or two. Last week, President Obama threatened to veto a two-year extension, so there is hope that this one-year extension will work instead. If the House and the Senate pass the bill, it is likely that the President will sign it into law.

The bill covers a host of provisions typically referred to as “tax extenders” as they are temporary tax breaks that need to be renewed every year or so. Though the bill has not yet passed into law, it is worth listing out some of the major provisions. Some highlights of the bill are listed below:

Individual Provisions (many are subject to income limits)

• $250 above-the-line deduction for teacher’s classroom expenses
• employer-provided mass transit benefits are increased to equal employer-provided parking benefits
• mortgage insurance premiums allowed as a deduction
• state and local sales taxes can be deducted in lieu of state and local income taxes
• tuition and fees can be deducted above-the-line
• tax-free distributions from IRAs directly to charities for those over 70 ½ years old
Business Provisions (many are subject to various limitations)

• research and experimentation credit is extended
• 15 year straight line depreciation for qualified leasehold improvements, qualified restaurant property and qualified retail improvements
• 50% bonus depreciation
• increased Section 179 expensing for 2014
• continuation of various business credits, including many renewable fuels credits

Stay tuned to the blog for the latest updates.

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