2014 Tax Extenders Legislation Finally Approved
/SUMMARY
On December 19, President Obama signed into law the Tax Increase Prevention Act of 2014 (the “Act”). The Act extended more than 50 expired tax-related provisions through the end of 2014, allowing taxpayers to claim a number of tax deductions, credits, and other benefits for the 2014 tax year. Since the Act does not generally cover 2015 and later years, Congress will have to debate the merits of these many expiring provisions all over again in 2015. Taxpayers are once again faced with making decisions based upon the hope that Congress will act to renew the provisions.
Legislative materials indicate that the 2014 expiration date was based upon budgetary and political concerns. The Act is projected to cost U.S. taxpayers $41.6 billion over 10 years, with no new federal revenue to offset the cost. Half of the cost comes from the $7.6 billion credit for business research and development costs, a $6.4 billion tax break for renewable energy production plants, and a $5.1 billion tax exception that allows financial firms and other businesses to defer U.S. taxes on certain foreign profits.
EXTENDED PROVISIONS
The heart of the Act is the extension of many tax deductions and credits that expired on January 1, 2014.
