On December 18th, Congress and the President signed into law the “Consolidated Appropriations Act, 2016” and “Protecting Americans from Tax Hikes (PATH) Act of 2015”, both of which provide a number of significant tax changes. The Protecting Americans from Tax Hikes Act will grow our economy and help American taxpayers keep more of their hard-earned dollars. This Act extends a number of important tax breaks and makes many of them permanent.
Keys Facts You Should Know
According to Accounting today, here are some of the over 20 permanent provisions:
- Increased expensing limitations and treatment of certain real property as Section 179 property;
- The exclusion of 100% of gain on certain small business stock;
- Reduction in S corporation recognition period for built-in gains tax;
- The enhanced Child Tax Credit;
- The enhanced American Opportunity Tax Credit;
- The enhanced Earned Income Tax Credit;
- The deduction for certain expenses of elementary and secondary school teachers;
- The deduction of state and local general sales taxes;
- Basis adjustment to stock of S corporations making charitable contributions of property.
For the full list of permanent tax provisions, click here.
Provisions extended and modified through 2019
- Bonus depreciation (50% for 2015-17, 40% in 2018, 30% in 2019);
- Delay on high-cost heath insurance plans (so-called “Cadillac” tax) from 2018 to 2020;
- The New Markets Tax Credit providing $3.5-billion allocation each year through 2019, the carryover period for the credit has also been extended to 2024;
- The Work Opportunity Tax Credit modified and enhanced for employers who hire long-term unemployed individuals (unemployed for 27 weeks or more) to 40 percent of the first $6,000 of wages.
Provisions revived and extended through 2016
- Modification of the exclusion of mortgage debt discharge;
- Mortgage insurance premiums treated as qualified residence interest;
- The above-the-line deduction for qualified tuition and related expenses;
- Over a dozen incentives for energy production and conservation.
For more information on these tax provisions and how they may impact your business or personal tax situation, please contact your Naden/Lean tax representative directly. You can also contact our office at 410-453-5500, and one of our staff members will be happy to assist you.