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Protecting Americans from Tax Hikes (PATH) Act of 2015

Late last week, Congress passed and the President signed the PATH Act of 2015.  Here are a few highlights:

Business Tax Provisions:

  • Permanent increase in IRC Section 179 deduction to $500,000. Deduction begins to phase-out when eligible property exceeds $2,000,000.
  • Research and Development credit now permanent.
  • 15-year straight-line depreciation for qualified retail improvements, qualified restaurant buildings and improvements, and qualified leasehold improvements.
  • Exclusion of 100% gain on certain small business stock.
  • Work opportunity tax credit extended through 2019.
  • Bonus depreciation extended through 2019.
  • Deduction for energy-efficient commercial buildings extended through 2016.
  • The 2.3% medical device excise tax will not apply to sales during 2016 and 2017

Individual Tax Provisions:

  • The deduction for state and local sales taxes in lieu of a deduction for state and local income taxes made permanent.
  • Permanent opportunity for taxpayers who are least 70 ½ years old to make up to $100,000 in qualified charitable distributions from individual retirement plans without including the distributions in income.
  • American Opportunity Tax Credit on secondary education made permanent.
  • The $250 deduction for expenses of teachers made permanent.
  • Above-the-line deduction for qualified tuition and related expenses extended through 2016.

The new legislation offers a great deal of tax savings and opportunities for many businesses and individuals. Please contact one of our tax professionals at 616-458-1835 to discuss how these changes can benefit you.

More information about the tax extenders can be found here:

http://www.journalofaccountancy.com/news/2015/dec/congress-passes-extender-and-tax-legislation-201513577.html

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