Tax Extender Legislation Moves to the President for Signature

Yesterday, December 16, the Senate passed the House-originated Tax Increase Prevention Act of 2014. The act extends, retroactive to January 1, 2014, almost all of the tax provisions that expired at the end of 2013, to be effective through December 31, 2014. Not extended were the credit for two-wheeled electric vehicles, the credit for energy-efficient appliances and the placed-in-service date for partial expensing of some refinery projects and the health coverage tax credit connected to trade-affected workers.

The House legislation was passed by the Senate without amendment; therefore, the tax extender legislation will now move to the president for an anticipated signature.

Uncertainty Will Return

With the president's signature, long-awaited deductions such as bonus and Section 179 depreciation will be available for 2014. But, just a mere 15 days from now, come January 1, 2015, the uncertainty returns as to whether those and the other extended tax provisions will be available for 2015 tax planning. While there will be a new Congress in place, some of the same differences as to the direction tax policy should take will still be present, once again leaving taxpayers to plan for their future without the benefit of firm guidance.

Moving Forward

But here's what happens once the president signs the tax extender legislation: the IRS can start making changes to the forms and systems that will be used to process 2014 tax returns, taxpayers can make changes to benefit their personal situations based on the extended legislation, and the electronic tax return computer programmers can finalize the systems that will allow paid tax preparers and taxpayers to efficiently file their returns. This is good news, but it still leaves a lingering question: Will we ever see a permanent solution?

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Eide Bailly's National Tax Office serves as a resource for clients to help analyze complex tax issues related to business decisions. Our professionals are committed to helping clients stay informed about tax news, developments and trends through various specialty areas, including cost segregation studies, wealth transfer, state and local taxation, international tax, IRS controversy and procedures, tax-exempt organizations and tax legislation.