Congress Passes Extenders, Cuts IRS Budget

Congress Passes Extenders, Cuts IRS Budget

In a vote of 76 to 16, the Tax Increase Prevention Act of 2014 (HR 5771) has been passed by Congress and is expected to be signed into law by President Obama in the next few days. The law adds one more year to the life of certain tax extenders that expired on December 31, 2013, keeping them in place for 2014 tax returns.

The IRS says the new law comes in time for the organization to reprogram their processing system to include the extenders. Further delays by Congress could have caused a delay in the start of the filing season.

Provisions included in the Tax Increase Prevention Act include, but are not limited to:

Section 102 - Extension of exclusion from gross income of discharge of qualified personal residence indebtedness.
Section 104 - Extension of mortgage insurance premiums treated as qualified residence interest.
Section 105 - Extension of deduction of state and local general sales tax.
Section 107 - Extension of above-the-line deduction for qualified tuition and related expenses.
Section 108 - Extension of tax-free distributions from individual retirement plans for charitable purposes.
Section 111 - Extension of research credits.
Section 125 - Extension of the 50 percent bonus depreciation for property acquired and placed into service in 2014.
Section 127 - Extension of increased spending limitations and treatment of certain real property as Section 179 property.

As part of an overall budget package, Congress also reduced the IRS budget by $346 million, adding more oversight. In addition, the law extended a provision prohibiting certain corporate "inverters" who move their headquarters overseas to avoid U.S. taxes from contracting with the U.S. Government, and extends the Internet sales tax ban for one year.

Click here to read a full report on the Tax Increase Prevention Act of 2014.

For more details on the extenders or on any other federal, state or local tax issues please contact Gray, Gray & Gray's Tax Department.

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Gray, Gray & Gray, LLP
781.407.0300

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