2015 Tax Extenders
On December 15th Congress extended certain tax bills that had expired on January 1st 2015 and made them retroactive to January 1st. Some of the extenders were made permanent and some were made temporary. What follows is a summary of the more important tax extenders that will affect the 2015 tax returns for many individual tax payers.
- State and local sales tax deduction- Made permanent
- Qualified charitable distribution from an IRA to a qualified charity. Allows taxpayers that have attained the age of at least 70 ½ years old to contribute up to $100,000 directly from their IRA to the charity. Made permanent
- American opportunity tax credit. This is a refundable education tax credit in which an eligible taxpayer can receive up to $2,500. Made permanent
- Section 179 expensing. Businesses can now expense the cost of equipment purchased in a year and deduct up to $500,000. Before the extender businesses could only deduct up $25,000 for equipment purchased. Equipment includes all types of office equipment, computers, manufacturing equipment, office furniture, certain leasehold improvements, and certain large vehicles in which the gross vehicle weight is over 6,000 lbs. Made permanent
- Deductibility of mortgage insurance premiums. Extended through 2016
- Exclusion of discharged mortgage debt on short sale. Extended through 2016
- Educator expense. Teachers can deduct up to $250 per year in educator expenses. Extended through 2016
- 50% bonus depreciation. Extended through 2019
- Enhanced child tax credit. Made permanent Other notable provisions in the legislation include the expansion of Sections 529 qualified expenses to include computer and related expenses. Other notables include the elimination of the Section 529 plan aggregation rule and the elimination of the 529 ABLE account in state residency requirement.