Lawmakers Hand Out Some Last Minute Tax Breaks
Lawmakers Hand Out Some Last Minute Tax Breaks
Merry Christmas taxpayers. Lawmakers in Washington have finally made a move to pass several tax extenders that have been hanging in limbo since the big crystal ball last dropped at 12:00:01 on January 1, 2014. So now that these tax breaks have been extended, what does that mean for taxpayers? Of course there are many aspects to these extenders, as there were more than 50 different provisions included in the bill, but let’s take a look at some of the most important aspects that will have the greatest impact on businesses and high net worth individuals.
Tax Provisions for Businesses
Several of the newly extended tax provisions will provide a big boost for businesses. The following are some of the most important:
- Section 179 Expense – Thanks to the tax provisions business owners got a couple of huge gifts from the government in regards to the Section 179 deduction. The qualifying limit on any equipment or software purchased throughout 2014 will remain at $500,000. It would have been only $25,000 without the extension. The bonus depreciation also remains at 50 percent for the 2014 tax year.
- Research Credit – This is great for businesses because it’s a credit, which is even better than a deduction. It can even be worth as much as 20 percent of many types of payments, including employee wages.
- S Corporation Built-In gains – although S corporations are often preferred, many small businesses are set up as C corporations, which are often taxed similarly to partnerships. In order to dissuade C corporations from choosing S status and then liquidating or selling their assets, there is a tax on any C corporation that takes on S status and sells its assets inside of a 10-year period. The new bill extends a law that drops that time period to only five years instead of 10.
- Personal Holding Redefined – the definition of “personal holding company income” has been changed in order to exclude the dividends received by U.S. shareholders from controlled foreign corporations.
Tax Provisions for High Net Worth Individuals
Businesses and companies weren’t the only ones who received good news. There were several provisions that will be good for high net worth individuals as well, including the following:
- Small Business Stock Gain – when you sell stock you usually receive a capital gain, which be can taxed as much as 23.8 percent. Skipping out on taxes completely when selling a stock would be great. The good news is that some small business stock that is acquired before January 1, 2015 and after September 27, 2010 is indeed tax-free. Another bonus, the excluded gain is not subject to the AMT.
- Charitable Contributions – For the wealthy that like to make large charitable donations to incur a nice deduction, there is another year of the charitable IRA rollover. It only applies to those IRA owners who are 70-1/2 or older, but those individuals can exclude up to $100,000 a year when they pay certain pubic charities directly from their IRA funds.
- Racehorse deduction – for those who own thoroughbred racehorses Section 168 allows for certain racehorses to be classified as three-year property.
Contact Us; We Can Help
If you need help reviewing and deciphering any of these latest tax provisions, then give GROCO a call today at 1-877-CPA-2006 and we can help you understand how the affect you and how you can use them to maximize your return. Or just click here to get in touch with us online.
We hope you found this article about “Lawmakers Hand Out Some Last Minute Tax Breaks” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Introduction (teaching business success at Barr Business School) In this interview, Alan Olsen, CPA, MBA discusses teaching business success with Dr. Frumi Rachel Barr. Dr. Frumi Rachel Barr is the Founder and Chief Mentor at the Barr Business School. Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is…
Introduction (one innovative approach to treat congenital heart disease ) In this interview, Alan Olsen, CPA, MBA discusses how regenerative medicine can fight congenital heart disease with featured guest Dr. Timothy Nelson, MD, PhD. Dr. Nelson is a general internal medicine practitioner, with a specialty interest in regenerative medicine and the director of the Todd…
Learn how to build and preserve legacy wealth for generations, the American Dreams Impact Legacy Conference! Tuesday, September 19th at 10 AM PST, Don’t miss this online event! Click this link to register for the webinar. 50% discount with the code “DREAM50“ Learn the importance of crafting your family’s legacy with intent, rather than leaving…
Introduction In this interview, Alan Olsen, CPA, MBA discusses building financial peace with Mike Bennett. Mike is the Managing Partner of Crewe Capital. Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Michael Bennett. Mike, welcome to the show. Mike Bennett Thanks for having me on. Alan…