Income
Tax Service For Small Businesses - In the recently enacted “Tax Increase Prevention Act of 2014,”
Congress has once again extended a package of expired or expiring individual,
business, and energy provisions known as “extenders.” The extenders are a
varied assortment of more than 50 individual and business tax deductions, tax
credits, and other tax-saving laws which have been on the books for years but
which technically are temporary because they have a specific end date. Congress
has repeatedly temporarily extended the tax breaks for short periods of time
(e.g., one or two years), which is why they are referred to as “extenders.” The
new legislation generally extends the tax breaks retroactively, most of which
expired at the end of 2013, for one year through 2014.
I'm
writing to give you an overview of the key tax breaks affecting businesses that
were extended by the new law. Please call our office for details of how the new
changes may affect you or your business.
The
extended business credits and special depreciation and expensing rules include:
... the
research credit;
... the
temporary minimum low-income housing tax credit rate for nonfederally
subsidized new buildings;
... the
military housing allowance exclusion for determining whether a tenant in
certain counties is low-income;
... the
Indian employment tax credit;
... the
new markets tax credit;
... the
railroad track maintenance credit;
... the
mine rescue team training credit;
... the
employer wage credit for activated military reservists;
... the
work opportunity tax credit;
...
qualified zone academy bonds;
...
three-year depreciation for racehorses;
...
15-year straight line cost recovery for qualified leasehold improvements,
qualified restaurant buildings and improvements, and qualified retail improvements;
...
7-year recovery period for motorsports entertainment complexes;
...
accelerated depreciation for business property on an Indian reservation;
... 50%
bonus depreciation (extended before Jan. 1, 2016 for certain longer-lived and
transportation assets);
... the
election to accelerate alternative minimum tax (AMT) credits in lieu of
additional first-year depreciation;
... the
enhanced charitable deduction for contributions of food inventory;
...
increase in expensing (up to $500,000 write-off of capital expenditures subject
to a gradual reduction once capital expenditures exceed $2,000,000) and
expanded definition of property eligible for expensing;
... the
election to expense mine safety equipment;
...
special expensing rules for certain film and television productions;
... the
deduction allowable with respect to income attributable to domestic production
activities in Puerto Rico;
... the
exclusion from a tax-exempt organization's unrelated business taxable income
(UBTI) of interest, rent, royalties, and annuities paid to it from a controlled
entity;
... the
special treatment of certain dividends of regulated investment companies
(RICs);
... the
definition of RICs as qualified investment entities under the Foreign
Investment in Real Property Tax Act;
...
exceptions under subpart F for active financing income;
...
look-through treatment for payments between related controlled foreign
corporations (CFCs) under the foreign personal holding company rules;
... the
exclusion of 100% of gain on certain small business stock;
... the
basis adjustment to stock of S corporations making charitable contributions of
property;
... the
reduction in S corporation recognition period for built-in gains tax;
... the
empowerment zone tax incentives;
... the
American Samoa economic development credit; and
... two
provisions dealing with multiemployer defined benefit pension plans (dealing
with an automatic extension of amortization periods and shortfall funding
method and endangered and critical rules), are extended through 2015.
I hope
this information is helpful. If you would like more details about these changes
or any other aspect of the new law, please do not hesitate to call.
(651) 621-5777, (952) 583-9108, (612) 224-2476, (763)
269-5396
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