Tax Provisions Extended?
According to Kiplinger (one of our primary sources for new tax information), all of the major tax provisions that lapsed in 2013 will be extended for 2014. Congress had all year to revive these tax breaks, but as usual they procrastinated and played the political game. The good news is that we believe the following tax provisions and many others will be extended for 2014. The deduction for state sales tax in lieu of income tax, college tuition deduction, $250 teacher supplies deduction, IRA payouts to charity for up to $100,000. Along with the exclusion from income of debt forgiveness on a primary residence of up to $2 million. For businesses the extension of 50% bonus depreciation, the R&D Credit, and higher section 179 ceilings for expensing new assets provides much needed relief for small business owners.
President Obama nixed a tentative deal to make a number of these breaks permanent, but the House passed a fallback plan reviving all key breaks for 2014. Kiplinger expects the Senate to “reluctantly” accept the House bill.
These extensions will expire a few weeks after it passes and business and individuals will face the same uncertainty when planning for taxes in 2015. Lets hope that Congress acts much sooner in defining which of these tax breaks will be continue, be made permanent or be allowed to expire.