Merry Christmas from Washington

By: Jason Schneider, CPA & Samantha Lopez

On Saturday December 18th, President Obama signed the much anticipated PATH (Protecting Americans from Tax Hikes) Act of 2015.  This Act extended some tax provisions that were set to expire on December 31, 2015 and even made some of the provisions permanent. 

The tax provisions that have been extended through 2016 are as follows:

  • Qualified tuition deduction
  • Nonbusiness Energy Property Credit
  • Cancellation of debt principal residence exclusion
  • Mortgage insurance premium deductible as interest

The tax provisions that have been extended through 2019 are as follows:

  • 50% Bonus depreciation
  • First year bonus depreciation on automobiles
  • Work Opportunity Tax Credit

The tax provisions that have been extended permanently are as follows:

  • Enhanced Child Tax Credit
  • Enhanced American Opportunity Tax Credit
  • Enhanced Earned Income Tax Credit
  • Above the line educator deduction ($250)
  • Sales tax deduction
  •  IRA to charity distribution
  • Research & Development Credit
  • Enhances Section 179 depreciation deduction
  • Enhanced exclusion of gain on sale of small business stock

As you can see, this was quite a package of tax deductions and credits that were set to expire.  In some cases, California does not conform to these deductions/credits, so they may not be applicable on your CA state income tax return.  Please contact us with any questions or if you would like clarification on any of these provisions.