President to Sign Bill for One-Year Tax Extenders Package

December 17, 2014

While it took nearly the entire calendar year for taxpayers to have certainty regarding the tax rules for 2014, it appears we now will have many of the tax incentives which expired on December 31, 2013 extended through 2014. Yesterday, the Senate passed a bill, which was also recently passed by the House, to extend numerous tax incentives for one year. The White House has indicated that the President will sign the bill.

Some key provision of the bill affecting business are as follows:

  1. Section 179 – Generally, the maximum deduction a company can make under section 179 would remain at $500,000 for 2014, with a dollar-for- dollar investment phase-out beginning at $2,000,000. This allows a taxpayer to immediately expense the cost of an investment (like equipment or software) in the year of purchase, instead of writing off the cost over the course of 3 to 15 years. This deduction can  be limited in certain circumstances. Consult with BiggsKofford on how this limitation will apply in your situation.
  2. 50 percent bonus depreciation – Bonus depreciation allows for immediate expensing of 50 percent of the cost of new equipment.
  3. Research and Development tax credit for business -the bill would extend this credit through the end of 2014. In general, the credit is equal to a percentage of wages paid for the performance of qualified research, supplies used in development efforts and payments made to third parties for design and testing.

Additionally, among the key individual incentives, for 2014 taxpayers can donate an individual retirement plan distribution to charity, up $100,000, without paying tax on the distribution.

For more information, contact BiggsKofford at (719) 579-9090

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