With a month left in 2015 it is that time again for Congress to act on the uncertainty of some beneficial tax breaks for taxpayers. This has been an ongoing problem with Congress, as in 2014 these tax benefits weren’t approved until December of 2014. This inaction has led to heartaches for CPAs, individuals and business owners as to their income tax planning.So as we move into December of 2015 we are back in the same opaque situation, except this year there is talk that these benefits might be approved through 2016!
There are many tax provisions that Congress could extend that, as I write this blog, are not allowed. Some of these include the benefit of allowing Nevada (and all states without state income tax) residents to deduct sales tax paid on Schedule A, allowing a 50% immediate deduction of new equipment and leasehold improvement purchases (bonus depreciation), allowing up to $500,000 as an immediate deduction for most capital equipment (section 179 depreciation) and the 100% exclusion of gain from the sale of small business stock.
Of course all of these will cost the American government lost revenue, as just the sales tax deduction could allow most taxpayers utilizing itemized deductions a $250 tax savings. I’m sure many businesses are holding off purchasing equipment that could expand the economy, waiting for the law to provide them with a 50% or 100% immediate deduction.
As a Reno CPA I look upon the inaction of Congress with frustration. Either keep these tax provisions in the IRS code or stop the bantering so we can accept what the law is and move on. And plan for the future.