— Steven M. Piascik, CPA, MT
September is a great time to be in Beverly Hills. The throngs of summer tourists have gone home, the weather is still great and we get “busy” with business. As a certified professional accountant (CPA), September is when I re-group with my clients on their tax planning, and advise them on the upcoming tax bill proposals/progress before the Holiday and year-end rush.
GREAT tax news occurred in July: the Senate Finance Committee in a 23-3 vote approved a two-year extension of dozens of tax deductions and credits which were due to expire in 2014. Although this bill is not law yet, this is a major tax coup aimed to help both families and businesses!
Some of the provisions represent substantial savings to businesses. They include:
- Section 179. Currently in 2015, taxpayers may immediately expense up to $25,000 of Section 179 property annually, with a dollar-for-dollar phase-out of the maximum deductible amount for purchases in excess of $200,000. However, the Senate Finance Committee bill proposed that the maximum amount and phase-out threshold in 2015 and 2016 to be extended to the levels in effect previously in 2010 through 2014 of $500,000 and $2 million respectively. The provision also extends the definition of Section 179 property to include computer software.
- The Work Opportunity Tax Credit (WOTC). This enables employers to receive a credit of up to $2,400 per employee for hiring individuals who have exhausted state and federal unemployment benefits.
- The Research & Experimentation (R&E) Credit. The provisions allow companies to claim the R&E credit against their Alternative Minimum Tax (AMT), which in the past has been a huge barrier to small and mid-sized businesses trying to claim the credit.
- Another provision will make the R&E Tax Credit refundable for small businesses, allowing companies that have existed less than five years and have less than $5 million in annual gross receipts to take a credit of up to $250,000 against payroll taxes paid on employee wages.
- A 2-year extension of the 15-year SL depreciation for qualified leasehold, retail and restaurant improvements, as well as new restaurant buildings which are placed in service before Jan. 1, 2017. The extension is effective for qualified property placed in service after December 31, 2014.
- A 2-year extension allowing film and television producers to expense the first $15 million of production costs incurred in the US ($20 million if the costs are incurred in economically depressed areas of US).
- A 50% gain exclusion for sale of qualified small business stock. The bill extends the 100 percent exclusion of the gain from the sale of qualifying small business stock that is acquired before January 1, 2017, and held for more than five years.
- Various energy credits (qualified fuel cell motor vehicles, construction of energy efficient homes, etc.)
See the complete list here: http://media.thinkadvisor.com/thinkadvisor/article/2015/07/22/taxextenders.pdf
To best take advantage of these lucrative provisions, consult with a qualified CPA to review all of these with you. In so doing, you will spur your own business and personal income growth with consistent tax planning in the years to come.