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2014 Tax Extenders Bill Passes Congress

As of Tuesday December 16, 2014, both houses of the U.S. Congress have now passed the Tax Increase Prevention Act of 2014, and analysts expect President Obama to sign the Bill.

The Bill retroactively extends certain tax breaks for individuals and industries that had effectively expired on January 1 , 2014. The extensions cover tax year 2014 only.

Of particular interest from a tax planning perspective, and extremely time-sensitive, the bill extends the ability of a taxpayer over 70-1/2 years of age to make direct gifts from an individual retirement account (IRA) to qualified charities, up to $100,000.00. The distribution is not counted as income or as a deduction to the taxpayer, but it may count toward a required minimum distribution.

Other provisions affecting individual income taxes that were extended (again, through 2014 only) include:

  • Mortgage debt forgiven by a lender will continue to not be treated as income.
  • Tax breaks for conservation easements on property are extended.
  • Teachers can continue to deduct up to $250 for classroom supplies
  • Mortgage insurance deduction is extended.
  • Deduction for sales tax paid is extended.

Taxpayers wishing to take advantage of the planning aspects offered by these extensions must act quickly. Assuming the Bill is signed into law, the extensions will expire (again) December 31, 2014.

To schedule an appointment to discuss any aspect of your tax or financial issues, please contact John J. McAneney, Michael O. Peale, George M. Riter or Kevin D. Birkhead, at Timoney Knox, LLP.

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