Expired Tax Provisions: Will Relief Arrive in Time to Plan?

CPAs & Advisors

Print Friendly, PDF & Email

The fate of 51 tax incentives is in the hands of our legislators in Washington. While some bills are pending in Congress, at this time none has gained enough traction to predict approval of extender legislation before December 31, 2015.

Tax extenders are a broad set of temporary tax breaks that sunset every few years and require a new vote to reinstate them. In December 2014 Congress retroactively extended numerous provisions, but only for 2014. As the end of 2015 rapidly approaches, we still have no clear indication that Congress will once again act to reinstate these tax incentives.

Individual tax incentives that expired at the end of 2014 include the above-the-line deduction for classroom expenses incurred by school teachers, above-the-line deduction for tuition and related expenses, the deduction for mortgage insurance premiums and the distribution of charitable contributions from individual retirement plans.

Business tax incentives that expired at the end of 2014 include the research and development (R&D) tax credit, the work opportunity tax credit, the new markets tax credit and the wage credit for employees on active duty. Bonus depreciation and enhanced expensing allowances, which are often viewed as economic stimulus tools, also expired at the end of 2014.

Refer to Yeo & Yeo’s Tax Brief on Expiring Tax Provision to learn more about the specific expired tax incentives for businesses and individuals, as well as the expired energy tax incentives. It is important to consider whether the elimination or revival of these tax laws will impact your tax scenario and plan for it to go either way. You may want to determine the increase in your tax liability and prepare accordingly if they are not revived.

Year-end tax planning is especially challenging this year because Congress may not decide the fate of these tax breaks until the very end of this year or possibly not until next year. We invite you to contact us to discuss your particular tax situation.


Want To Learn More?

Connect with one of our professionals today.