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Tax Increase Prevention Act of 2014

Signed by the President on December 19, 2014, the aptly dubbed "Tax Increase Prevention Act of 2014", retroactively extends key favorable individual and business provisions including: 

  • 179 deduction. Extension of increased expensing limitations and treatment of certain real property as section 179 property. The provision would extend the small business expensing limitation and phase-out amounts in effect from 2010 to 2013. Once signed, the act allows deductions of up to $500,000 when qualified investments of property placed in service during 2014 don't exceed $2 million. Without this bill, 2014 deductions would have been limited to $25,000 for investments of up to $200,000.  As under prior law, when capital expenditures exceed the maximum amount ($2,000,000 for 2014) the 179 deduction is reduced dollar for dollar.  
  • Bonus depreciation. The provision would extend 50 percent bonus depreciation to property acquired and placed in service during 2014 (2015 for certain property with a longer production period). This provision would also allow taxpayers to elect to accelerate the use of AMT credits in lieu of bonus depreciation under special rules for property placed in service during 2014. 
  • Research credit. The provision would extend through 2014 the research and development (R&D) tax credit. The R&D credit generally allows taxpayers a 20 percent credit for qualified research expenses or a 14 percent alternative simplified credit. 
Be sure to ask your accountant about the impact of these and other provisions on your business.