The Tax Increase Prevention Act of 2014 was passed a few days ago which extended certain tax relief provisions that expired at the end of 2013 for both individuals and business. The major tax breaks for Individuals are: •The option to deduct state and local sales taxes rather than deducting state and local income taxes. (Mostly benefits those who live in the seven no-income tax states (Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming). If you made major purchases during the 2014 year, this may be beneficial to you. •The deduction of up to $250 in unreimbursed classroom expenses for teachers. •Above-the-line deduction of up to $4,000 in qualified tuition and related expenses. There are certain income limitations. •The ability to exclude up to $2 million in discharge of residential mortgage indebtedness from gross income. Normally taxpayers have to pay income taxes on forgiven debt. •The deduction for mortgage insurance premiums. •Energy-efficient home improvements tax credit. This one is listed under “energy” extenders but it affects homeowner’s personal tax return. Get a tax credit of up to $500 for making energy-efficient home improvement (new windows, upgraded heating/a-c equipment, etc.) •Tax-free distributions from an Individual Retirement Account for charitable purposes for taxpayers over 70 ½. The major tax breaks for Businesses are: •The accelerated depreciation deduction, which allows companies to deduct 50% of the cost of a qualified asset in the year it is acquired. •The increased first-year deduction under Section 179 for qualified assets placed in service during the year. •The credit for expenses related to research & development activities. •The Work Opportunity tax credit, which is equal to 40% of a portion of the first-year wages paid to members of targeted groups such as unemployed veterans and food stamp recipients. If you would like more information, contact us today to help you make the most out of the new law.
Posted on: Sat, 27 Dec 2014 17:49:50 +0000
Trending Topics
Recently Viewed Topics
© 2015