For whatever reason, Congress has a flare for the dramatic. It became popular about 14 years ago to pass tax legislation that had sunset provisions. What that means is that in order to extend these tax provisions, Congress would have to act. They don’t call it an “Act of Congress” for no reason. Typically, in our industry it is just understood that Congress will act on these expiring tax provisions, so it makes our job as professionals a little easier for planning purposes. The following is a list of expiring tax provisions, these are not all inclusive, but I have included the most popular ones.
Individuals
Above-the-Line Deduction for Certain Expenses of Elementary and Secondary School Teachers
Deduction for State and Local Sales Taxes
Above-the-Line Deduction for Qualified Tuition and Related Expenses
Premiums for Mortgage Insurance Deductible as Qualified Interest
Parity for Exclusion for Employer-Provided Mass Transit and Parking Benefits
Exclusion of Discharge of Principal Residence Indebtedness from Gross Income for Individuals
Credit for Health Insurance Costs of Eligible Individuals
For businesses the list is even more extensive:
Tax Credit for Research and Experimentation Expenses
Work Opportunity Tax Credit
Indian Employment Tax Credit X X X X X X
Accelerated Depreciation for Business Property on Indian Reservations
Credit for Railroad Track Maintenance
15-Year Straight-Line Cost Recovery for Qualified Leasehold, Restaurant, and Retail Improvements
Treatment of Certain Dividends of Regulated Investment Companies
Employer Wage Credit for Activated Military Reservists X X
Special Expensing Rules for Film and Television Production X X
RIC Qualified Investment Entity Treatment under FIRPTA
Special Rules for Qualified Small Business Stock X X
Increase in Expensing to $500,000 / $2,000,000 and Expansion of Definition of Section 179 Property/Bonus Depreciation
Reduction in S Corporation Recognition Period for Built-In Gains Tax X
Election to Accelerate AMT Credits in Lieu of Additional First-Year Depreciation
Low-Income Housing Tax Credit (LIHTC)
Charitable Provisions
Enhanced Charitable Deduction for Contributions of Food Inventory X X X l
Tax-Free Distributions From Individual Retirement Accounts for
Charitable Purposes
Basis Adjustment to Stock of S Corporations Making Charitable
Contributions of Property
Special Rules for Contributions of Capital Gain Real Property for
Conservation Purposes
Energy Provisions
Construction Date for Eligible Facilities (Including Wind) to Claim the Production Tax Credit (PTC) or the Investment Tax Credit (ITC) in Lieu of the PTC
Special Rule to Implement Electric Transmission Restructuring
Credit for Construction of Energy Efficient New Homes
Energy Efficient Commercial Building Deduction
Mine Rescue Team Training Credit
Election to Expense Mine-Safety Equipment
Credit for Energy Efficient Appliances
Credit for Nonbusiness Energy Property
Alternative Fuel Vehicle Refueling Property
Incentives for Alternative Fuel and Alternative Fuel Mixtures
Incentives for Biodiesel and Renewable Diesel
Placed-in-Service Date for Partial Expensing of Certain Refinery Property
Credit for Electric Drive Motorcycles and Three-Wheeled Vehicles
Second Generation (Cellulosic) Biofuel Producer Credit
Credit for Production of Indian Coal
Special Depreciation Allowance for Second Generation (Cellulosic) Biofuel Plant Property
Community Assistance Provisions
Qualified Zone Academy Bonds – Allocation of Bond Limitation
New Markets Tax Credit
American Samoa Economic Development Credit
Empowerment Zone Tax Incentives
As you can see the list is pretty extensive. Typically these extenders, have been extended by now. However, this is an election year, and if these are extended, they won’t be until after the election and by a lame duck Congress.
The problem for tax accountants is how do we plan in the wake of an uncertain tax climate? The answer is that we typically know from all the chatter what will be extended and what won’t be.
If you have a major life change, or decision that you have to make, contact our firm, and we can discuss the tax implications of your decision.
Reference: History Of The PAN Card.