On December 18th, Congress and the President signed into law the “Consolidated Appropriations Act, 2016” and “Protecting Americans from Tax Hikes (PATH) Act of 2015”, both of which provide a number of significant tax changes. The Protecting Americans from Tax Hikes Act will grow our economy and help American taxpayers keep more of their hard-earned dollars. This Act extends a number of important tax breaks and makes many of them permanent.
Keys Facts You Should Know
According to Accounting today, here are some of the over 20 permanent provisions:
- Increased expensing limitations and treatment of certain real property as Section 179 property;
- The exclusion of 100% of gain on certain small business stock;
- Reduction in S corporation recognition period for built-in gains tax;
- The enhanced Child Tax Credit;
- The enhanced American Opportunity Tax Credit;
- The enhanced Earned Income Tax Credit;
- The deduction for certain expenses of elementary and secondary school teachers;
- The deduction of state and local general sales taxes;
- Basis adjustment to stock of S corporations making charitable contributions of property.
For the full list of permanent tax provisions, click here.
Provisions extended and modified through 2019
- Bonus depreciation (50% for 2015-17, 40% in 2018, 30% in 2019);
- Delay on high-cost heath insurance plans (so-called “Cadillac” tax) from 2018 to 2020;
- The New Markets Tax Credit providing $3.5-billion allocation each year through 2019, the carryover period for the credit has also been extended to 2024;
- The Work Opportunity Tax Credit modified and enhanced for employers who hire long-term unemployed individuals (unemployed for 27 weeks or more) to 40 percent of the first $6,000 of wages.
Provisions revived and extended through 2016
- Modification of the exclusion of mortgage debt discharge;
- Mortgage insurance premiums treated as qualified residence interest;
- The above-the-line deduction for qualified tuition and related expenses;
- Over a dozen incentives for energy production and conservation.
For more information on these tax provisions and how they may impact your business or personal tax situation, please contact your Dental CPA tax representative directly. You can also contact our office at 410-453-5500, and one of our staff members will be happy to assist you.