02-08-2016, 07:56 PM
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Join Date: Jan 2007
Location: New Jersey, USA
Congress agrees to Extend Many Expired Tax Breaks!
"By a 23-3 bipartisan vote, the Finance Committee sent a package of tax breaks for individuals, businesses, and energy production to the Senate floor in August." Extensions for the following breaks are included in the package or were approved earlier in the year.
- Higher education tuition deduction. Your clients may still be able to deduct between $2,000 and $4,000 of qualified tuition expense.
- Energy credits. This includes credits for home improvements that improve energy efficiency, such as heating and cooling systems, insulation and windows.
- Educator expense deduction. Teachers can claim up to $250 of unreimbursed classroom expenses.
- Commuting tax breaks. The extension gives clients who commute by train or bus the same $250 monthly tax break for employer-provided subsidies as those who receive employer assistance for parking costs. The current mass transit deduction is $130 per month.
- Deduction for state income tax. This deduction makes a huge difference to residents of states without a state income tax. This extension has already been approved.
- IRA charitable donations. IRA owners at least age 70 ? can still make tax-free donations of up to $100,000 from IRAs to certain qualified charities.
- Mortgage forgiveness exclusion. If homeowners who are underwater on their mortgages have part of their loan forgiven by a bank, up to $1 million of the forgiven debt (or $2 million for couples) would be excluded from treatment as income.
- Research and development tax credit. This has been extended for two years.
- Deduction for small business equipment purchases of up to $2 million. This is extended and now includes computer software.
- Work Opportunity Tax Credit. Clients who own businesses can claim a credit equal to a certain percentage of wages paid to new hires of one of nine targeted groups, including members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) program, qualified veterans and ex-felons, designated community residents, vocational rehabilitation referrals, qualified summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients.
- Energy efficiency tax breaks. This includes a 10 percent credit for energy efficiency improvements to existing homes, and deductions for construction of energy efficient homes and commercial buildings.