Late Tuesday, December 16, the Senate passed the tax package, H.R. 5771. This legislation includes the “Tax Increase Prevention Act of 2014 (TIPA),” which extends over 50 currently expired “extender” provisions through 2014. This tax package also includes H.R. 647, the “Achieving a Better Life Experience (ABLE) Act of 2014,” which establishes a new type of tax-advantaged savings program for individuals with disabilities and makes a number of other non-extender tax changes.
Highlights of the extender bill include the Research and Development (R&D) Credit, first-year bonus depreciation and the increased Section 179 expensing limits.
It is important to note that the tax extender provisions apply retroactively to January 1, 2014 but do not extend into 2015. Earlier proposals to permanently extend some expired provisions, or to extend all provisions two years, through 2015, were not adopted.
This tax alert lists many of the tax breaks retroactively extended by the Tax Increase Prevention Act of 2014 for individuals and businesses, as well as depreciation and energy-related provisions.