The US Senate has passed the Tax Increase Prevention Act of 2014 (H.R. 5771), with a mere two weeks left in 2014. The legislation, which is expected to be signed by President Obama shortly, provides long awaited relief to both business and individual taxpayers. But even with little time remaining in the year, this legislation could have a big impact on your bottom line. Of the more than 50 tax breaks extended through the end of 2014, we have listed various credits worth discussing with your CPA:

Business Tax Extender provisions of note:

  • Extension of research credit – This incentive to increase your investments in R&D, will return up to 20% of your qualified research expense which could result in significant tax savings
  • Extension of increased expensing limitations and treatment of certain real property as section 179 property – Small businesses can deduct up to $500,000 in qualified personal property-acquisition cost in 2014
  • Extension of work opportunity tax credit – Earn tax credits for hiring employees from certain groups, such as veterans and food stamp recipients, worth as much as $9,600 per employee
  • Extension of bonus depreciation – Accelerate the recovery of the costs of your depreciable assets with 50% bonus depreciation on qualified assets

Individual Tax Extender provisions of note:

  • Extension of deduction of  State and local general sales taxes – Take an itemized deduction for state and local sales tax paid that exceeds state and local income tax
  • Extension of above-the-line deduction for qualified tuition and related expenses – enrollment and tuition expenses at a higher education institution in 2014 may be eligible for deduction
  • Extension of tax-free distributions from individual retirement plans for charitable purposes – Make direct contributions from an IRA of up to $100,000 per year without income tax for charitable contributions

While the above list highlights some of the more broadly covered tax extenders, a full list can be found at Congress.gov’s Tax Extenders Act of 2013-2014 page.

What does it mean for you?

Small business owners and individuals can benefit from understanding and exercising the relevant tax extensions mentioned above. Barnes Dennig offers a variety of tax services including consulting and financial planning that can help you and your business best take advantage of this late legislation.

Let a consultant help you capitalize on tax extenders and fuel your business with insight that goes beyond the numbers. Reach out to us here.