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Tax Byte

Major Tax Provisions Extended

On December 16, 2014, Congress passed the “Tax Increase Prevention Act of 2014” (TIPA).  President Obama is expected to sign the legislation into law soon.

The legislation is extensive and we will report on other provisions later, but one primary purpose of the legislation is to extend certain key tax provisions that expired on December 31, 2013.  TIPA resurrects these provisions retroactively to January 1, 2014.

Many of the tax breaks in TIPA extend a host of benefits for businesses, but there are some provisions that apply to individuals.  A few key provisions include the following:

  • Bonus depreciation

TIPA extends the provision that enables businesses to “write-off” 50% of the cost of new equipment and other property placed in service before January 1, 2015.  This includes an $8,000 enhanced deduction for qualified business vehicles.

  • Increase Section 179 expensing

TIPA extends the provision of higher limits for expensing the purchase of equipment and other property.  Going into 2014, the first-year expensing limitation was capped at $25,000 and started phasing out when a business purchased more than $200,000 of equipment.  The new extension keeps the limitation at $500,000 of expense with a phase-out starting at $2,000,000 of purchases.  But the extension is for 2014 only. It will expire at the end of the year.

  • Research and development credit

TIPA extends the R&D credit in the same form as it existed previously.

  • Nonbusiness energy property credit
TIPA extends the provision that allows individuals a tax credit of up to a lifetime limit of $500 for qualified energy efficient property.

There are numerous other provisions in the TIPA and we will report more in future emails.  In the meantime, if you have any questions on those or any of the sections noted above, please give us a call.


Victor Christopher, CPA, CVA

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