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  • Accounting - Tax Season

    By Jaclyn Felder-Strauss, Full-Time Faculty School of Business
    Published February 2015


    “Just before recessing for the holidays, the House and Senate passed the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). President Obama signed the Act and a FY 2016 omnibus on December 18th. The Act does considerably more than the typical tax extenders legislation seen in prior years. It makes permanent over 20 key tax provisions including the research tax credit, enhanced Code Sec. 179 expensing, and the American Opportunity Tax Credit. It also extends other provisions, including bonus depreciation, for five years; and revives many others for two years. In addition, many extenders have been enhanced. Further, Act imposes a two0-year moratorium on the ACA medical devise excise tax. The House passed the Act on December 17 by a vote of 318-109; The Senate approved the Act along with the FY 2016 omnibus on December 18 by a vote of 65 to 33.” (CCH Incorporated, December 18,2015; Protecting Americans from Tax Hikes, Tax Briefing) 

    Each year taxpayers and tax preparers along with Certified Public Accountants sit on pins and needles waiting to hear whether Congress, the House of Representative, and, finally, the President approve, deny, or extend certain tax deductions. The decisions made are game changers for many people when it comes to their potential tax liability due on the following April 15 which is the deadlines for payment of the previous year’s tax liability. There were a number of tax extenders approved for individuals for the 2015 tax year. Some are more commonly and widely utilized then others and will be highlighted in this article. 

    IRA Qualified Charitable Contributions

    One tax extender for the 2015 tax year includes IRA Qualified Charitable Contributions. The new law makes this tax break one that is permanent so that is always available moving forward. (Irs.gov, Publication 526).

    State and Local Sales Tax Deduction

    The State and Local Sales Tax Deduction will now allow individuals to deduct their sales tax as an itemized deduction. This has now been signed as a permanent deduction for the 2015 tax years and beyond.   

    Enhanced Expensing

    There has now been Enhanced Expensing made permanent under Section 179 of the Internal Revenue Code. The $500,000 expensing limitation and $2 million dollar phase-out amounts have been extended and treated retroactively. These amounts are also indexed for inflation starting in the 2015 tax year.

    The Work Opportunity Credit

    For business owners , the Work Opportunity Credit has been extended through 2019 and expanded as well. This credit allows for employers to receive a tax credit if they hire individuals from eligible target groups with significant barriers to employment. This is great news for employers and potential employee alike. Over $1 billion each year has been claimed by employers thus far.

    In summary, it appears that the majority of those tax savings offered in the 2014 tax year are now offered in 2015 but permanently extended so come next year we will not have to be concerned if these items will be taken away. This is a positive move for taxpayers, and careful planning and preparation for filing should be considered before jumping into the actual preparation of the 2015 tax return.



    Jaclyn Felder-Strauss, CPA, is a full-time faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

    This article serves and general information and should not be relied upon as official tax advice. For tax application to your individual situation you want to be sure to consult your personal professional accountant and tax advisor.


    Citations
    IRS website. (Publication 526).
    CCH Incorporated, December 18,2015; Protecting Americans from Tax Hikes, Tax Briefing

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