With the New Year upon us, individuals and businesses can breathe a sigh of relief as the President signed the Tax Increase Prevention Act extending over 50 beneficial tax provisions for the 2014 tax year. Some of the important provision benefitting individual filers and businesses respectively are as follows:
Individual Tax Provisions
- Above-the-line deduction for teacher classroom expenses
- Discharge of indebtedness on principal residence excluded from gross income of individuals
- Mortgage insurance premiums treated as qualified residence interest
- Deduction for State and local general sales taxes
- Above-the-line deduction for qualified tuition and related expenses
- Tax-free distributions from IRAs to certain public charities for individuals age 70-1/2 or older, not to exceed $100,000 per taxpayer per year
Business Tax Provisions
- Work opportunity tax credit
- 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
- 50% Bonus depreciation
- $500,000 Increased expensing limitations and treatment of certain real property as section 179 property
- Exclusion of 100 percent of gain on certain small business stock
(Source: Tax Foundation "Congress approves Tax Extenders for 214", by Andrew Lundeen, December 16, 2014)