Provided by Nicole Albrecht
Once again, Congress has acted at the eleventh hour to bring back some expired tax perks. H.R. 5771, the Tax Increase Prevention Act, was passed and signed into law by President Obama on December 19. Here is a rundown of the key tax provisions it retroactively reinstates for 2014.
You could partly or entirely fulfill your RMD by donating up to $100,000 from an IRA to a qualified charity or non-profit organization. The gift may be made tax-free and it could help you hold your 2014 taxable income under thresholds at which you would be subject to higher Medicare premiums and taxes on your Social Security benefits.
You have the option to deduct state & local sales tax once more. This can be a big tax break if you live in a state that does not collect income tax.
H.R. 5771 extends the mortgage insurance premium deduction that went away at the start of the year, and it also retroactively reinstates the tax exclusion for canceled mortgage debt for homes that were sold in 2014.
The above-the-line tuition & fees deduction that lets parents (and students) lower taxable income amounts by up to $4,000 is back in place for 2014. So is the $250 classroom teacher expense deduction.
Any qualifying energy efficient purchases are eligible expenses for a tax credit.
Finally, the limits on Section 179 deductions were retroactively set back to match the 2012 and 2013 limits: $500,000 deduction limit; $2,000,000 limit on equipment purchases and 50% bonus depreciation on new equipment purchased after the $2 Million cap is reached. Purchased must have been made by the last day of 2014.
If you have any question about H.R. 5771 Nicole Albrecht may be reached at (951) 719-1515 or Nicole@thinkfas.com. www.thinkfas.com