President Obama signed into law the “Protecting Americans from Tax Hikes Act of 2015.” This law extends some of the popular deductions and tax credits. View a copy of the summary presented by the Ways and Means Committee for more detail.
Among the tax extenders that were made permanent are the following:
- Partial exclusion of income for mass transit and parking benefits provided by an employer
- Tax-free distribution for direct contributions from a retirement account to qualified charitable organizations
- State and local sales tax deduction – allows for the option of using taxes paid instead of state and local income tax payments as an itemized deduction. The sales tax deduction may be more beneficial than deduction state and local income tax payments if the taxpayer purchased a high end item, such as a vehicle.
- Computer and Technology Costs – these are now included as qualified 529 education expenses
- Gain on small business stock – Exclusion on gains from the sale of qualified small business stock.
The following tax provisions were extended through December 31, 2016:
- Discharge of Mortgage Debt – Up to $2 million of principal residence mortgage debt forgiveness may be excluded from income
- Mortgage Insurance Premiums for principal residence – These will be considered qualified residence interest.
- Tuition Deduction – The above-the-line deduction of qualified tuition and related expenses.