For the Star Journal

A law recently signed in Washington DC is like an unexpected holiday gift, according to a Northwoods CPA. Matt Whalen, CPA, Manager of Tax Services for Northland CPAs says the

Northwoods CPA Matt Whalen explained the recently signed federal law regarding tax breaks.

Protecting Americans from Tax Hikes Act of 2015 (PATH Act) that was passed by the House and Senate at the end of last week and signed into law by President Obama recently, “extends numerous important tax breaks for Americans, and makes many of these tax breaks permanent.”

According to Whalen, the Act does considerably more than the typical tax extenders legislation seen in prior years. It makes permanent over 20 key tax provisions, including the research tax credit, enhanced Code Sec. 179 expensing, and the American Opportunity Tax Credit.

“The legislation works to prevent tax increases,” explains Whalen. “It also extends other provisions including bonus depreciation, for five years; and revives many others for two years. Many extenders were enhanced.”

Some of the tax provisions impacting families and individuals that have become permanent include the following:
• Child Tax Credit
• Enhanced American Opportunity Tax Credit
• Earned Income Tax Credit
• Teacher’s Classroom Expense Deduction
• Charitable Distributions from IRAs
• The special rule for contributions of capital gain real property made for conservation purposes

Some provisions impacting businesses:
• Code Sec. 179 Expensing (Pre-Act, the dollar limit for Code Sec. 179 expensing for 2015 had reverted to $25,000 with an investment limit of $200,000. The Act permanently sets the Code Sec. 179 expensing limit at $500,000 with a $2 million overall investment limit before phase out – both amounts indexed for inflation beginning in 2016.
• Research Tax Credit
• Bonus depreciation, at 50 percent for 2015-2017 and phased down to 40 percent in 2018 and 30 percent in 2019
• The exclusion of 100% of gain on certain small business stock
“While the PATH Act of 2015 is not perfect,” says Whalen, “it does include many provisions that the average taxpayer can benefit from. Whether you are a student facing tuition and book costs or a homeowner who made energy efficient improvements in your home, it can mean more money in your pocket when paying your taxes.”

Northland CPAs provides a variety of services including business and personal tax returns preparation, estate planning and trusts, business planning and growth strategies, as well as accounting and payroll support with offices in Rhinelander, Woodruff and Tomahawk.