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On Friday December 18, 2015 the President signed the “Protecting Americans from Tax Hikes Act of 2015” With dozens of temporary and permanent extensions, alternate dates and new rules. The law is comprehensive. The following are some highlights.
Permanent Changes Effective retroactively to the beginning of 2015
- American Opportunity Credit
- $250 teacher deduction
- Sec 179 deduction $500k
- Larger earned income credit
- $175 mass transit and parking exclusion for employees
- State and local sales tax deduction
- Trustee to charity tax-free IRA transfers that qualify as RMD
- Research credit (plus AMT application for small business with <$50 million sales)
- Employer wage credit for active duty military subsidy pay
- 100% exclusion for small business Section 1202 stock
- Built in gains period for S corporations now 5 years
- Computer and technology costs qualify as education expenses
Temporary Changes Extended through 12/31/2016
- Principal residence mortgage debt exclusion
- Mortgage insurance deduction as qualified residence interest
- Tuition deduction
Temporary Changes Extended through 12/31/2019
- New markets tax credit
- Work opportunity credit
Depreciation Changes Retroactive to 1/1/2015
- Retail/restaurant/leasehold improvements permanent 15 year depreciation life
- Retail/restaurant/leasehold improvements permanent $250,000 Sec. 179
- Bonus depreciation applies at 50% through 2017 (reduced thereafter, expires 2019))
- Super Section 179 of $500,000 applies permanently (Phase out $2,000,000)
- Now inflation adjusted starting in 2016
- Section 179 applies to software permanently
- Section 179 applies to heating/air equipment starting years beginning after 12/31/15
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