Many valuable tax breaks expired December 31, 2014. For them to be available for 2015, Congress had to pass legislation extending them — which it now has done, with the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law by the President on December 18. The PATH Act not only revives expired breaks for 2015 but also makes many breaks permanent.
A few of the extended tax breaks that may benefit you or your business include:
- Section 179 expensing is extended permanently with an annual limit of $500,000, indexed to inflation starting in 2016.
- Bonus depreciation is extended through 2019. Bonus depreciation provides a depreciation deduction equal to 50% of the cost of qualifying property in the first year it is placed in service. Although this tax break is extended through 2019, it has reduced benefits for 2018 and 2019 and is completely phased out by 2020.
- Accelerated depreciation options for qualified leasehold-improvement, restaurant and retail improvement property is extended permanently.
- The option to deduct sales taxes in lieu of state and local income taxes is extended permanently.
- For teachers, the “above-the-line” deduction of up to $250 for school supplies is extended permanently, indexed for inflation in 2016.
- Tax-free IRA distributions to charities is extended permanently.
- The research tax credit is extended permanently.
- The Work Opportunity credit is extended through 2019 and enhanced beginning in 2016.
- Various energy-related tax incentives are extended through 2016.
Please contact us for more information on these and other breaks under the PATH Act.