Congress passes “extenders” legislation reviving expired tax breaks for 2015
Many valuable tax breaks expired December 31, 2014. For them to be available for 2015, Congress had to pass legislation extending them — which it now has done, with the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law by the President on December 18. The PATH Act not only revives expired breaks for 2015 but also makes many breaks permanent, generally extends the rest through either 2016 or 2019, and enhances some breaks.
Here is a sampling of extended breaks that may benefit you or your business:
- The deduction for state and local sales taxes in lieu of state and local income taxes (extended permanently),
- tax-free IRA distributions to charities (extended permanently),
- bonus depreciation (extended through 2019, but with reduced benefits for 2018 and 2019),
- enhanced Section 179 expensing (extended permanently and further enhanced beginning in 2016),
- accelerated depreciation for qualified leasehold-improvement, restaurant and retail improvement property (extended permanently),
- the research tax credit (extended permanently and enhanced beginning in 2016),
- the Work Opportunity credit (extended through 2019 and enhanced beginning in 2016), and
- various energy-related tax incentives (extended through 2016).
Please contact us for more information on these and other breaks under the PATH Act. Keep in mind that, for you to take maximum advantage of certain extended breaks on your 2015 tax return, quick action may be required.
Protect your deduction: Verify that a charity is eligible to receive tax-deductible contributions before you donate
Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. But before you donate, it’s critical to make sure the charity you’re considering is indeed a qualified charity — that it’s eligible to receive tax-deductible contributions.
The IRS’s online search tool, Exempt Organizations (EO) Select Check, can help you more easily find out whether an organization is eligible to receive tax-deductible charitable contributions. You can access EO Select Check at http://apps.irs.gov/app/eos. Information about organizations eligible to receive deductible contributions is updated monthly.
Also, with the 2016 presidential election heating up, it’s important to remember that political donations aren’t tax-deductible.
Of course, additional rules affect your charitable deductions, so please contact us if you have questions about whether a donation you’re planning will be fully deductible. We can also provide ideas for maximizing the tax benefits of your charitable giving.
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