Several tax law provisions expired on December 31, 2013. We have been waiting for legislation extending these expired provisions all year. We finally got it last week.
It is good news and bad news. The good news is the expired provisions were extended. The bad news is they are only extended through December 31, 2014.
Some of the major items extended include the following:
- Research and Development tax credit
- Work Opportunity and Empowerment Zone tax credit
- New Markets tax credit
- Various energy tax credits
- $500,000 Section 179 expensing limit
- 50% Bonus Depreciation
- Section 179D expensing for certain energy efficient commercial building property
- S-Corporation 5 year Built-in gains recognition period
- Tax free transfers from IRAs to Charities
I think what Congress did is ridiculous. They continue to play games with small businesses by failing to make these provisions permanent and/or waiting all year to extend them. Bonus depreciation was a provision added to the law to spur investment to help the economy. What good does it do to pass it in mid-December and have it expire on December 31?
I understand my clients that can use the extended provisions, welcome them. However, how can they do tax planning? Come on Congress! Let us know what tax law we can expect sooner than later. In the past, they extended the provsions for at least two years. Now, we all need to wait again to see what the rules will be in 2015.
Some believe the short term extension was done so we don’t have the law fixed for 2015. This way congressman Ryan, the new Chairman of the House Ways and Means Committee, can try to get overall tax reform passed in 2015.
I am sitting on the edge of my seat waiting. (That was a joke.)
We will see what happens.
Merry Christmas to all! I hope you have a great Christmas week. I know I am.
My entire family will be at our house on Christmas Eve; 3 parents, 4 children, assuming our Son in the Military can come (he returned to the USA last week after serving in Afghanistan for several months), and 9 grandchildren. It will be awesome.