2014 Tax Extender Update
At the end of 2013 over 50 individual and business tax provisions expired. Congress has still made little progress on determining which of these will be retroactively reinstated for 2014 even as we approach the end of the tax year. It looks like no decision will be made in November since Congress adjourns for Thanksgiving and will reconvene starting December 1st. For our clients we are providing them with the worst case scenario, assuming that the provisions that expired will not be retroactively be reinstated. If provisions are not reinstated, individuals and businesses could be facing some tax surprises in 2014. Here are several of the main expired provisions and who they affect:
Individual Tax Provisions
- Sales Tax Deduction
- Mortgage Forgiveness Exclusion
- Charitable Donation of IRAs
- Tuition and Fees Deduction
Business Tax Provision
- Research and Development Tax Credit
- Section 179 Expensing (has reverted back to the $25,000 per year limit)
- Energy Tax Credits
No deals have been finalized, but much of the debate is over making some of these provisions permanent like the Earned Income Tax Credit. The White House has come out to say they will veto a bill that makes expiring corporate tax breaks permanent. It will be interesting to see if the provisions that do pass are only reinstated for one year and defer the issue to 2015 when Republicans control Congress. Either way, it is an important time to pay attention to those extenders that may affect your business or family to prepare for 2014 taxes.