Tax Law Changes for 2014/2015

EXPIRE Act

The Senate has proposed a bill that includes several tax law changes and extensions that could take effect for the 2014-2015 tax years. The bill is called the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act. A few highlights of the bill include the following provisions:

Individual Provisions

1. Deduction for expenses of elementary and secondary school teachers:
   • The bill would extend the $250 above-the-line tax deduction through December 31, 2015 for teachers and educators for expenses paid or incurred for books, supplies, computer equipment, and other related expenses used in the classroom.
2.  Mortgage debt forgiveness:
   • Under current law, taxpayers who have mortgage debt canceled or forgiven after December 31, 2013 could be required to include that amount in taxable income. The bill would extend the provision that allows up to $2 million of forgiven debt to be excluded from income ($1 million if married filing separately) through December 31, 2015.
3.  Tax-free distributions from individual retirement plan for charitable purposes:
   • The bill would extend for two years the provision that allows an individual retirement account owner who is age 70-1/2 or older to exclude from gross income up to $100,000 per year in distributions made directly from the IRA to a qualified public charity.

Business Provisions

1. 15-year straight cost recovery for qualified leasehold improvements:
   • The bill extends through 2015, the temporary 15-year cost recovery period for certain leasehold, restaurant, retail improvements, and new restaurant buildings. This provision applies to improvements that are placed in service before January 1, 2016.
2. Bonus depreciation
   • The bill provides an extension for 50 percent bonus depreciation to qualified property purchased and placed in service before January 1, 2016.
3. Temporarily extend the increase in the maximum amount and phase-out threshold under section 179:
   • Current tax law permits a taxpayer to 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. This bill proposes to increase the maximum amount and phase-out up to the levels that were in effect from 2010 through 2013 ($500,000 and $2 million respectively).

If you have any questions on these provisions or how they can affect you, please contact our office.

Moore, Ellrich & Neal is a full-service accounting firm offering a comprehensive range of business and personal accounting services. The main office is located at 11025 R.C.A. Center Drive in Palm Beach Gardens. For information or to schedule an appointment, call (561) 624-0355, visit www.ssjgcpa.com, or email Karen.Moore@mencpa.com.

Gia Castellino joined the tax and assurance services department of Moore, Ellrich & Neal, P.A. in November 2009. She is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. In 2009, Gia graduated from the University of Central Florida with a Bachelors Degree in Accounting. She also earned a Masters Degree in Forensic Accounting from Florida Atlantic University in 2011.

Gia is a native of Jupiter, Florida.  She and her husband live locally.