fireworks2It Almost Feels Foreign To Say It, But…

Thank You Congress!

Our elected leaders did some re-gifting during 2015. They restored tax cuts that had been allowed to expire and made them retroactive for 2015. Kiplinger’s reported, “In an important twist to the habitual year-end gamesmanship, however, this time Congress actually made many of [the tax cuts] permanent and even improved a few.” The tax law changes help people who:

  • Commute to work: During 2016, employees who drive can pay for parking with up to $255 of pre-tax salary, and people who rely on mass transit to get to work can spend the same amount of pre-tax salary on transportation. (Slide 3)
  • Have children in college: The American Opportunity College Credit, a $2,500 tax credit for families with qualifying college students, was made permanent, although the credit phases out at higher income levels. (Slide 4)
  • Live in states with no or low income tax: The choice about whether to deduct state income tax or state sales tax paid during the year on a federal tax return was renewed. It expired at the end of 2014, and now applies retroactively to 2015. (Slide 6)
  • Want to make charitable contributions using required minimum distributions (RMDs): Once again, IRA owners who are age 70½ or older can donate up to $100,000 of their traditional IRAs directly to charity, tax-free, using all or part of their RMDs. It’s now a permanent tax break. (Slide 7)
  • Own businesses: The $500,000 “expensing” cap was restored for 2015, and will be permanent going forward. Bonus depreciation also was extended. (Slide 12)

These are just a few of the tax cuts Congress passed. Give us a call to discuss how these tax changes, and others, may benefit you.

Weekly Focus – Think About It

“I live my life in widening circles?that reach out across the world.”
                                                                                  –Rainer Maria Rilke, Austrian poet

Sources:

http://www.kiplinger.com/slideshow/taxes/T054-S001-valuable-tax-breaks-brought-back-to-life/index.html

http://www.onbeing.org/program/wild-love-world/feature/widening-circles/1444

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