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Keep up to date with the latest tax changes!

Annual Tax Changes, 2015 Edition

Christopher Kirk

As usual, Congress enacted year-end changes to the Internal Revenue Code in order to extend tax breaks, delay the effective date of new taxes, close certain loopholes, and take general steps to meet taxpayer concerns.  Adopted on December 17, 2015, and signed into law by President Obama on December 18, the Protecting Americans from Tax Hikes Act of 2015 included the following provisions:

 

·         Enhancements to the child tax credit, earned income tax credit, and American opportunity tax credit were made permanent

·         The deduction for elementary and secondary school teachers purchasing schoolroom supplies was made permanent, indexed for inflation, and extended to purchases of materials used for professional development

·         The exclusion from income of distributions from individual retirement accounts directly to charitable organizations was made permanent

·         The exclusion of gain on qualified small business stock was made permanent

·         The recognition period for built-in gains for existing corporations electing S corporation status was permanently reduced to five years

·         The limitation on expensing of certain equipment was permanently increased to $500,000

·         Bonus depreciation under Section 168(k) was extended through 2019

·         The new markets tax credit and work opportunity tax credit were extended through 2019

·         The exclusion from taxable income of cancellation-of-indebtedness income resulting from foreclosures and short sales of personal residences, which had expired at the end of 2014, was reauthorized and extended through 2016

·         Treatment of mortgage insurance premiums as mortgage interest was reauthorized and extended through 2016

·         Tax credits for various alternative energy, energy-efficiency and other energy conservation programs were extended through 2016

·         The start date for the medical device excise tax, which was included in the Affordable Care Act as a means to help pay for insurance under that law, was delayed until 2018

·         Use of 529 Plan funds was expanded to include the purchase of computers and related equipment

·         Use of personal email accounts by IRS employees to conduct official business was prohibited

·         Taking official actions by IRS employees for political purposes was made a terminable offens