Expired Tax Provisions Extended: Only Days Left to Utilize IRA Charitable Rollover for 2014!

Last week, President Obama signed the Tax Increase Prevention Act (TIPA) retroactively extending over 50 expired tax provisions through Dec 31, 2014.

The last minute extension could provide a retroactive tax break for businesses and individuals who have already made certain expenditures this year, and also provides an opportunity for last-minute spending, such as making charitable contributions from IRAs.

TIPA Provisions for Individuals:

  • The deduction for state and local general sales tax in lieu of state and local income taxes.  (Especially beneficial for those living in states with no state income tax.)
  • The deduction of up to $4,000 of qualified tuition and related educational expenses, which is phased out at an AGI of $65,000 for single filers and $130,000 for joint filers.
  • The tax deduction of mortgage insurance premiums.
  • The tax exclusion of up to $2 million of imputed income from the discharge of indebtedness on a principal residence.
  • The tax exemption of distributions from individual retirement accounts for charitable purposes for individuals aged 70 1/2 or older.
  • The above-the-line tax deduction of up to $250 of classroom expenses of elementary and secondary school teachers.

TIPA Provisions for Businesses:

  • 50% bonus depreciation in the first year for new capital purchases.
  • The option to expense, rather than capitalize, up to $500,000 for purchases of Section 179 property.
  • The research and development tax credit.
  • The new markets tax credit.
  • The work opportunity tax credit.
  • The 100% exclusion from gross income of gain from the sale of small business stock.
  • The basis adjustment rule for stock of an S corporation making charitable contributions of property.

Once again, TIPA provisions expire on December 31, 2014 and it is unclear what 2015 will hold so time is of the essence!!!  Contact us if you have questions.

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