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Section 179
extended
From Sam Custer
OSU Extension, Darke County
Tristan Weis from Speaker Boehner's office shared this with me last
night and asked that I share it with you:
The Section 179 depreciation information that the Senate passed it last
night and the President is expected to sign it in the next few
days. So, any of the ag folks that have been holding out on
equipment purchases still have a little bit of time to get some of them
in.
H.R. 5771 (the Tax Extenders Bill) passed by the House on Dec 3, 2014
was voted on and passed by the Senate on Dec 16, 2014 retroactively
expanding the Section 179 deduction limits thru 12/31/2014. This
does NOT cover tax year 2015, so if there is something you want to get
in this year, it has to be done before midnight on 12/31/14.
Below is a complete summary for you review and release.
Senate Passes Tax Extender Bill---It is on to the President!
By David Marrison
The United States Senate passed the Tax Extenders Bill (HR 5771: Tax
Increase Prevention Act of 2014) by a vote of 76-16 on Tuesday,
December 16 and now is on its way to President Obama for his
signature. This bill was passed by the House of Representatives
by a vote of 378-46 on December 3, 2014. This bill “extended” a number
of key tax relief provisions that expired either at the end of calendar
year 2013 or during 2014. In total the bill includes 72 individual,
business and energy tax extenders. It should be noted the
extenders are only good for 2014. Congress will have to go back
to the drawing board in 2015 to see if they wish to extend any of the
tax extender provisions for 2015 and beyond.
The two major portions of this legislation which farmers, and other
business owners, were waiting anxiously for include the extension of
bonus depreciation and Section 179 Expensing. This legislation
includes a one-year retroactive extension of the 50 percent bonus
depreciation for new property acquired and placed in service during
2014 (2015 for certain property with a longer production period).
The legislation also extended the Section 179 Expensing. Many
farmers have been using Section 179 expensing to depreciate new and
used equipment in the year of purchase. However, in 2014, this
deduction was set to drop to $25,000 with phase-out provisions kicking
in for any dollars spent over $200,000. The tax extender
legislation returns the Section 179 Expensing level to $500,000 with
the phase-out provisions not kicking in until $2 million. The
special rules that allow expensing for computer software, qualified
leasehold improvement property, qualified restaurant property, and
qualified retail improvement property also were also extended through
2014.
Some additional tax extenders which have an agricultural interest
include:
Ø Extension of special rule for contributions of capital gain
real property made for conservation purposes. The provision would
extend through 2014 an enhanced deduction for contributions of capital
gain real property for conservation purposes. This provision also would
extend the enhanced deduction for certain individual and corporate
farmers and ranchers. A qualified conservation contribution is a
contribution of a real property interest to a qualified organization,
exclusively for conservation purposes.
Ø Extension of incentives for biodiesel and renewable diesel. The
provision would extend through 2014 the $1.00 per gallon production tax
credit for biodiesel, and the small agri-biodiesel producer credit of
10 cents per gallon. The provision also extends through 2014 the $1.00
per gallon production tax credit for diesel fuel created from biomass.
Ø Extension of special allowance for second generation biofuel
plant property. The provision would extend through 2014 50 percent
bonus depreciation for cellulosic biofuel facilities.
Some of the most popular tax extenders important to the American
taxpayer include:
Ø Extension of above-the-line deduction for qualified tuition and
related expenses. The provision would extend through 2014 the
above-the-line deduction for qualified tuition and related expenses for
higher education. The deduction is capped at $4,000 for an individual
whose adjusted gross income (AGI) does not exceed $65,000 ($130,000 for
joint filers) or $2,000 for an individual whose AGI does not exceed
$80,000 ($160,000 for joint filers).
Ø Extension of deduction for certain expenses of elementary and
secondary school teachers. The provision would extend through 2014 the
above-the-line deduction for the eligible expenses of elementary and
secondary school teachers. The deduction is capped at $250 and covers
expenses that otherwise would have to be itemized.
Ø Extension of tax-free distributions from individual retirement
plans for charitable purposes. The provision would extend through 2014
the ability of individuals at least 701⁄2 years of age to exclude from
gross income qualified charitable distributions from Individual
Retirement Accounts (IRAs. The exclusion may not exceed $100,000 per
taxpayer in any tax year.
Ø Extension of credit for energy-efficient new homes. The
provision would extend through 2014 the tax credit for manufacturers of
energy-efficient residential homes. An eligible contractor may claim a
tax credit of $1,000 or $2,000 for the construction or manufacture of a
new energy efficient home that meets qualifying criteria.
Details about the legislation can be found at:
https://www.govtrack.us/congress/bills/113/hr5771https://www.govtrack.us/congress/bills/113/hr5771
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