On December 18, the Senate passed the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act). Many popular tax breaks had expired December 31, 2014, so for them to be available for 2015, Congress had to pass legislation extending them. But the PATH Act does more than that. I am here to explain to you all of the benefits this Act has, the drawbacks, and how this applies to you.
Instead of extending breaks for just a year or two, the PATH Act makes many popular breaks permanent and extends others for several years. The PATH Act also enhances certain breaks and puts a moratorium on the Affordable Care Act’s controversial medical device excise tax.
Many of the PATH Act’s provisions provide an opportunity for taxpayers to enjoy significant tax savings on their 2015 income tax returns — but quick action may be needed to take advantage of some of them. The breaks made permanent and the extenders through 2019 all have ramifications on individual and businesses alike.
Some highlights include:
- IRA distributions to charity
- Deduction for certain expenses of elementary and secondary school teachers
- State and local sales tax deduction
- Small business stock gains exclusion
- Enhanced child credit
These are just a few of the breaks and extensions in this Act. In order to capitalize on all of the advantages or shelter yourself from the negatives it is important that you sit down with an accountant to learn more. At Doherty & Associates we always say, “We bring peace of mind to your bottom line” but we also keep YOUR money where it belongs, with YOU!
Debbie is Founder and President of Doherty & Associates