2015 saw significant tax legislation despite expectations that major changes would wait until after the 2016 election. The legislation made several individual and business tax provisions permanent, including the American Opportunity Tax Credit, deductions for teachers' expenses and charitable distributions from retirement accounts. It also extended benefits like the research tax credit, enhanced expensing and tax credits for business expenses.

1. Issue 5, Jan 2016
American Taxpayer Act
2015 was undeniably the most significant
year for tax legislation since the American
Taxpayer Relief Act of 2012...despite starting
out with the assumption that significant tax
legislation would be in a holding pattern
until after the 2016 Presidential elections.
2015 closed with a long list of regulations
and rulings to its credit...despite concerns
that a reduced IRS budget would slow
guidance to a crawl.
Permanent Tax Law Extensions for
Individuals:
 American
Opportunity
Tax Credit –
provides a
credit up to
$2,500 per
student for
post-
secondary
education
 Deduction
for certain expenses of elementary and
secondary school teachers
 Transit benefits parity – establishes
permanent parity between the transit and
parking portions of commuter benefits
 Deduction for state and local sales taxes
 Reduced earnings threshold for additional
child tax credit
 Modification of the earned income tax
credit
 Tax-free distributions from individual
retirement plans for charitable purposes
for individuals age 70 ½ and older
Permanent Tax Law Extensions for
Businesses:
 Research tax credit
 Enhanced expensing under Code Sec.
179
 Charitable deduction for contributions of
food inventory
 Basis adjustment to stock of S
corporation making charitable
contributions of property
 Employer wage credit for activated
military reservists
 15-year straight-line cost recovery for
qualified leasehold improvements,
qualified restaurant buildings and
improvements, and qualified retail
improvements
 Reduction in S corporation recognition
period of built-in gains tax
 Subpart F exception for active financing
income
The Insight
Issue 5, January 2016Villela & Shilts, LLC
www.villelashilts.com