Here we are again. It’s December 8, 2014 and many 2014 U.S. tax laws are still uncertain. Back in April we addressed some of the major tax breaks which expired at the end of 2013 including (but not limited to):

• Direct distributions of up to $100,000 from IRA’s to charity for retirees aged 70.5 and older
• Exclusion of forgiven debt income (up to $2 million) related to primary residences
• Deductions for teachers’ classroom supplies and expenses
• Tuition and fees deduction
• Private mortgage insurance deductions
• Election to write off local sales tax instead of state income taxes
• 50% bonus depreciation
• Ability to expense up to $500,000 of new business assets
• and the R&D credit

All in all more than 50 “temporary” tax breaks expired at the end of 2013. Last week the U.S. House voted to pass a “bare minimum” package which would extend many of expired tax breaks just long enough to get us through the upcoming tax filing season, but would continue to leave taxpayers in the dark as to what will be deductible in 2015 and what will not. “The public deserves better than the equivalent of looking at a Magic 8-ball” Senate Finance Committee Chairman Ron Wyden (D- MI) told reporters.

Bipartisan disappointment was expressed after a more inclusive deal which would have extended some of the expired tax breaks for two years (through 2015) and made others permanent was scrapped after a threatened veto from the President. For now we wait on the Senate vote. If for some reason the extension vote does not pass, chaos will follow and tax season will likely face further delays.

Stephen Osborne, CPA
Certified Public Accountant
sosborne@mo-cpa.com