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Tax Break Extensions for 2014 Returns

At the end of 2014, the Senate approved HR 5771, or The Tax Increase Prevention Act of 2014, which passed by a landslide in the House early last month on December 3rd. This bill extended expiring tax provisions from the end of 2013 and 2014 for individuals and businesses whom Sweeten CPA service, so we wanted to keep our clients informed about what this means, specifically about which provisions are being extended:

  • The threshold under Section 179 has been increased to its previous threshold of $500,000, from its diminished threshold of $25,000, allowing for the expensing of qualified asset purchases rather than the spreading out of those expenses over time through regular depreciation.
  • Energy efficient renovations to your home, like more effective doors and windows for your home, are back under the previous rules with a 10% credit of the cost of the improvements, with a lifetime limit of $500.
  • Energy efficient renovations to commercial property, like replacing existing energy systems with high efficiency systems, are back under the previous rules with a possible deduction of up to $1.80 per square foot.
  • Other improvements, made to leased buildings, restaurant property, and retail establishments, are also back under the previous depreciation rule involving a 15 year straight-line depreciation method.
  • For seniors, seventy and a half years or older, 2014 distributions from your IRA to charity are tax-free.
  • Teachers can again claim above-the-line deductions of up to $250 for books and materials used in the classroom purchased out-of-pocket.
  • Tuition-payers can again claim above-the-line deductions of up to $4,000 for higher education expenses.
  •  Cost of new property purchased or used in 2014 can be expensed by 50%, using the Special Depreciation rule.

Enjoy these extensions and if you’re confused, don’t worry: Sweeten CPA can manage these changes in your tax return this year!