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Congress Passes Protecting Americans from Tax Hikes Act of 2015

Better late than never, right?  With just days to go before year-end, Congress has passed the “Protecting Americans from Tax Hikes Act of 2015” (PATH).

At Willis & Jurasek we are focused on your future; we hope that the following partial outline will assist you with finalizing your year-end tax planning.  As always, if you have any questions please contact us.

PATH extended or made permanent many of the tax incentives that Congress has been extending late in the year (retroactive to the beginning of the year) since roughly 2010.  We have compiled this list for a taste of what was passed.

  • The Section 179 expense limitations have been permanently extended.  This means those who spend up to $2,000,000 on capitalized personal property can take a current year expense of up to $500,000.
  • The 15 year recovery period for qualified leasehold improvements, qualified restaurant property and qualified retail improvements is made permanent.
  • The 50% bonus depreciation for qualified purchases has been temporarily extended.  For new property placed in service during 2015-2017, you may expense up to 50% of the cost.  This phases down to 40% in 2018 and 30% in 2019 & expiring in 2020.
  • The credit for Research & Experimentation has been permanently extended.  Additionally, eligible small businesses may claim the credit against AMT and certain employer’s FICA tax liability.
  • The Work Opportunity Tax Credits (WOTC) for employers hiring qualified veterans and employees from targeted groups is extended to 2019.
  • The reduced built-in gain recognition period for S Corporations is made permanent at 5 years.
  • The ability for IRA transfers directly to charity in lieu of taking required minimum distributions is made permanent.
  • The tuition deduction is extended until December 31, 2016.
  • The $250 teacher supply deduction is made permanent.
  • The enhanced earned income tax credit is made permanent.