Happy Holidays – As expected, President Obama signed the tax extender package on Friday, December 18th, 2015. The package, “Protecting Americans from Tax Hikes Act of 2015” (PATH) extends tax benefits that individuals and business have come to rely on over the past several years. “PATH” makes a number of the tax provisions permanent, meaning in many instances, we won’t have to wait for annual tax legislation. This in and of itself is somewhat of a holiday gift.
The tax benefits for individuals include the permanent extension of the child tax credit, earned income credit, enhanced American Opportunity tax credit, and the ability for teachers to take an above the line deduction for certain qualify expenses. Of course there are income thresholds and phase-outs to consider, which are included here.
For businesses the benefits include permanently extending the R & D credit, the 15 year periods for qualified leasehold improvements and increased Sec. 179 depreciation limitations and phase-outs to $500,000 and $2,000,000 respectively.
There are a number of provisions that were extended through December 31, 2016, including: the exclusion from gross income the discharge of qualified principle residence indebtedness as well as the above-the-line deduction for tuition and related expenses.
The above represent just a sampling of the tax benefits included in the “PATH” legislation. For your convenience, we’ve included a full summary, click here.
As always, if you have questions, please give us a call.