The Senate recently passed a one-year tax extenders bill that had previously been passed by the House. The bill will now go to the President’s desk for signature. In brief, nearly all of the 60 tax extenders were continued – unchanged – for one year through the end of 2014.  Here are a few highlights:

Key provisions:

  • Section 179 – expensing – keeps in place the small business expensing limitation and phase-out amounts of $500,000 and $2 million

  • Accelerated/bonus depreciation – in general, 50 percent bonus deprecation for property acquired and placed in service during 2014

  • Research and Development Tax Credit – continues the R&D credit. Companies can now take the Alternative Simplified Credit on amended returns.

  • 179D – energy efficient commercial buildings – is extended for buildings and or improvements placed in service for 2014

  • Sales and use tax – continues deductible as an itemized deduction

  • Charitable IRA Rollover- continues maximum $100,000 exclusion from gross income qualified charitable distributions from IRA’s by persons 70-1/2 years of age

  • Teacher’s expense deduction –continues the $250 deduction from gross income eligible qualified expenses of elementary and secondary school teachers

  • Tuition deduction- continues deduction up to $4,000 for qualified tuition and related expenses

  • Energy credit- continues up to $500 credit for qualified energy improvements

Changes next year impacting taxes are too early to predict – especially with a new Republican majority coming into the Senate.  This will depend to a large degree on the level of priority the White House sets on taxes and tax reform.  We will keep you posted.  Cheers and Happy Holidays!