Metz Lewis Brodman Must O'Keefe

Metz Lewis Brodman Must O'Keefe

Posted on December 21, 2015

On December 18, 2015, the Senate passed a $1.1 trillion tax package with over $600 billion in tax breaks.

Please find below the changes that made Santa’s nice list.

Affordable Care Act Taxes Delayed
The tax imposed under the Affordable Care Act on medical device manufacturers is postponed for two years.  The bill also delays the tax on expensive employer-sponsored health plans (“Cadillac plans”) for two years.

Research and Development Tax Credit Made Permanent
The business tax credit for research and development costs is made permanent under the bill.  Additionally, the bill includes provisions broadening the credit for start-up businesses.

Donations to Charities from IRAs Extended
Taxpayers over age 70 and ½ who either have already made charitable donations from an IRA this year or are awaiting to do so may soon breathe a sigh of relief.  The IRA charitable donation provision will become permanent upon passage of the new bill.  The limit of charitable contributions from an IRA would still be capped at $100,000 per person per year.  The donation continues to count toward the required minimum distribution (RMD) each year.

Tax Credit for College
The proposed legislation would also include a permanent American Opportunity Tax Credit, providing a $2,000 annual credit for tuition for up to four years of college.  The credit would phase out for couples with an Adjusted Gross Income exceeding $160,000.

Child Tax Credit Made Permanent
The existing Child Tax Credit ($1,000 per child) would be made permanent.

Earned Income Tax Credit Made Permanent.
The Earned Income Tax Credit would be permanently extended.

Teacher’s Supplies Tax Credit Made Permanent.
The tax package would make the $250 deduction for qualifying educational supplies purchased by primary and secondary school teachers permanent.  The deduction is an above-the-line deduction, so even taxpayers who do not itemize can benefit.

Public Transit Benefit Made Permanent.
The legislation would permanently peg the pre-tax public transit benefit to the amount pre-tax parking benefit of $255 per month.

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