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