The United States Senate passed the Tax Increase Prevention Act of 2014 by a vote of 76 to 16 earlier this week, on Tuesday, December 16. This is the bill that the House of Representatives had passed earlier in December. I expect President to sign the bill into law soon.

The main purpose of the new tax legislation is to extend of bunch of tax provisions that expired at the end of 2013.

The biggest revenue impacts of the "Tax Increase Prevention Act"" (TIPA) were the deduction for state and local sales taxes and the credit for research and development.

Many of my business clients are favorably impacted by the extension of the 2013 deduction limit under Section 79. Had the 2013 limit of $500,000 not been extended the annual limitation for Section 179 would have been $25,000. Section 179 allows taxpayers to elect to deduct the entire cost of new property plaece in service in a trade or business, rather than the normal depreciation rule that spread the deductions out into the future.

I have several clients that were very interested in the provision that provides an exclusion from income up to $100,000 for an individual that directly makes charitable gifts with IRA (or other qualified plan) distributions. This is beneficial to donors because it allows them to circumvent some of the limitations on deductions for charitable contributions.

Additional details will be published here soon. 

- Mark S Gleason CPA
  www.lakes-cpa.com