The specific laws that were extended, beginning for the 2015 tax year, in a permanent fashion (not all inclusive):
- $1,000 child tax credit – possibly refundable depending on income
- The American Opportunity Tax Credit – for those with college age kids
- The $250 above the line deduction for elementary and secondary school teachers. This is now also set to index with inflation beginning in 2016.
- Itemized deduction for state and local general sales tax – a nice one for South Dakota residents with no state income tax!
- Tax-free distributions from IRAs direct to charities for up to $100,000 (must be older than 70.5 years old)
- The Research and Development tax credit, with a few minor changes for the better
- Section 179 expensing (or the direct write off allowance) for $500,000, also set to index with inflation beginning in 2016. This one still has a few limitations placed on it, so beware of those things as well.
There were also some parts of the tax law that were extended, beginning for the 2015 tax year, for 5 years instead of permanently which include but are not limited to:
- The work opportunity tax credit
- Bonus depreciation, on a tiered down system. 50% first year write off on new assets for the first 3 years, 40% in year 4, 30% in year 5.
And a few two year extension items, beginning for the 2015 tax year, include:
- The exclusion for the discharge of qualified principal residence indebtedness
- Mortgage insurance premiums being treated as qualified residence interest for those who qualify
- The above the line deduction for qualified tuition fees for those who qualify
- The Indian employment tax credit
There are several other items that have a much smaller population effect that we have not included here, but some of these are really good news for you and us alike. Contact your KT representative today for further guidance on how the newest tax law may affect you.