Extender Bill Passes

A visible expression of confusion in tax policy out of Washington D.C. is the treatment of a short list of tax laws that have been extended only to expire once again.

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In late December, Congress finally acted to extend many of these tax provisions for 2014. Here is a list of the commonly used tax provisions that will be available to you when you file your 2014 tax return.

Image 2Teacher $250 deduction for qualified classroom expenses.

 Impacts: All qualified educators including those who do not itemize their deductions.

Image 2Deduction for state and local general sales taxes (in place of state income tax deduction)

 Impacts: All taxpayers in states without income taxes who itemize deductions and taxpayers who have high sales tax obligations versus state income tax obligations.

Image 2Deductibility of home mortgage insurance premiums.

  Impacts: All qualified home owners who carry mortgage insurance.

Image 2Tuition and fees deduction

 Impacts: All students who can benefit from this additional program to help reduce the cost of their education.

Image 250% additional first year depreciation deduction and higher Section 179 expense limits. The new Section 179 annual expense limit is now $500,000 (up from $25,000 prior to the extension.)

 Impacts: All businesses who have acquired and placed qualified assets into service during 2014.

Image 2Tax-free contributions from qualified retirement plans for charitable contributions.

 Impacts: All qualified taxpayers 70½ years old (or older) who made charitable contributions directly from their traditional IRAs.

There are many other provisions in this tax law. Clarifications on the signed bill will become known over the next few months. Please remember these extended tax laws are not in place for the 2015 tax year.