The recently passed Federal Budget (Spending) Bill, and companion legislation, which forced compromises by Republicans and Democrats in both the Senate and House, as well as by the President, has several key tax included impacting both businesses and individuals.
- One of the provisions of the Affordable Care Act (ObamaCare) was also 'delayed' (for 2 years) under the spending bill, that being the so called 'Cadillac Health Plan' penalty, which would have resulted in a 40% excise tax on health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage.
- Noted among the provisions is the permanent extension of Section 179 expensing for small and medium-sized businesses. The bill increases the maximum amount and phase-out threshold in 2015 for Section 179 expensing to $500,000 and $2-million respectively. Currently these amounts are $25,000 and $200,000 respectively.
- Bonus depreciation is extended under the Act through 2019, permitting bonus depreciation of 50% for capital equipment purchased and placed into service through 2017. Bonus depreciation will phase down to 40% in 2018, and 30% in 2019. Bonus depreciation is available for eligible new real or personal property with a recovery period of 20 years or lease.
- The Act extends several expired (or expiring) energy-related tax provisions, including the production tax credit and the investment tax credit. These are primarily geared toward wind and solar power related facilities. Other energy-related tax provisions include a two-year extension several tax credits that benefit the bio-energy sector.
- The bill makes permanent a 15-yeear write-off period for qualified leasehold improvements, restaurant and retail improvement property.
- The bill also makes permanent the f5-year holding period to avoid the built-in gain tax for the conversion of corporations from C to S status.
- A variety of 'tax breaks' for us common people are also included, things like tax breaks for commuters using mass transit, the American Opportunity tax credit which helps pay college costs, and enhancement to child tax credits and the earned income tax credits all will now be permanent.