What does the new tax act mean for me?

Protecting American’s from Tax Hikes Act of 2015 was signed into law by the President on Friday December 18th, 2015. The Act makes many popular tax breaks permanent and extends others through 2019.

Some permanent tax provisions of particular interest for individuals include:

• Tax free payouts of up to $100,000 from an IRA directly to a 501c3 non-profit (for those 70 ½ and older).

• The ability for itemizers to deduct sales tax instead of income taxes. Particularly beneficial in our home state of Tennessee where there is no income tax.

• Mortgage insurance premiums may be treated as qualified residence interest.

• Enhanced Child Tax Credit and American Opportunity Tax Credits.

Businesses also saw some favored tax provisions made permanent including:

• The Research and Development credit.

• 15 year depreciation for qualified leasehold improvements and restaurant renovations.

• 100% gain exclusion for those that buy small business stock and hold for five years.

• Accelerated depreciation, under Section 179, of certain personal property

While some are still temporary, such as:

• 50% bonus depreciation extended through 2017 phased to 40% in 2018 and 30% in 2019 before expiring.

• The Work Opportunity Credit for employing economically challenged workers is available through 2019.

These are just some highlights from the many items covered in the bill. Please contact us to discuss any questions.