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Volume 8; Tax Increase Prevention Act, 2014

Posted by Admin Posted on May 11 2015



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TAX INCREASE PREVENTION ACT OF 2014                     


Article written by, Jodi Carlen,
In the recently enacted "Tax Increase Prevention Act of 2014," Congress has once again extended a package of expired or expiring individual and business provisions known as "extenders." The extenders are a varied assortment of individual and business tax deductions, tax credits, and other tax-saving laws which have been on the books for years but which technically are temporary because they have a specific end date. Congress has repeatedly temporarily extended the tax breaks for short periods of time (e.g., one or two years), which is why they are referred to as "extenders." The new legislation generally extends the tax breaks retroactively, most of which expired at the end of 2013, for one year through 2014.

The following lists highlight the extenders that we feel most affect our clients. Please call our office for details of how the new changes may affect you or your business. Additional extenders do exist, and we would be more than happy to discuss those with you if you are interested.

Individual extenders

The following provisions which affect individual taxpayers are extended through 2014:

  • The $250 above-the-line deduction for teachers and other school professionals for expenses paid or incurred for books, certain supplies, equipment, and supplementary material used by the educator in the classroom
  • The exclusion of up to $2 million ($1 million if married filing separately) of discharged principal residence indebtedness from gross income
  • The deduction for mortgage insurance premiums deductible as qualified residence interest
  • The option to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes
  • The above-the-line deduction for qualified tuition and related expenses
  • The provision that permits tax-free distributions to charity from an individual retirement account (IRA) of up to $100,000 per taxpayer per tax year, by taxpayers age 70 and ½ or older
  • The credit for nonbusiness energy property

Business extenders

The following business credits and special rules are generally extended through 2014:  

  • The work opportunity tax credit
  • 15-year straight line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
  • 50% bonus depreciation (extended before Jan. 1, 2016 for certain longer-lived and transportation assets)
  • The enhanced charitable deduction for contributions of food inventory
  • The increase in expensing (up to $500,000 write-off of capital expenditures subject to a gradual reduction once capital expenditures exceed $2,000,000) and an expanded definition of property eligible for expensing
  • The exclusion of 100% of gain on certain small business stock
  • The reduction in S corporation recognition period for built-in gains tax 


Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

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