Posted by admin , on December 20, 2015
Courtland "Cory" Van Deseun, CPA discusses
Tax-credit extenders make for some difficult planning
Special Report: Accounting and Tax Law
Last week, the U.S. government extended more than 50 tax credits that have a critical impact on how businesses, big and small — as well as individuals — plan for their future.
The tax-extenders package, announced Dec. 16, is said to be worth approximately $800 billion and includes a number of renewable energy tax provisions while bringing some permanency to the tax code.
It makes permanent the research-and-development credit, considered the big-ticket item of the package; enhances Section 179 expense deductions at the higher levels of the prior year; the 15-year life of qualified restaurant and retail improvements: and state and local tax deductions. For the benefit of middle- and low-income families, also made permanent are the earned income tax credit and the American opportunity tax credit.
This year’s plan helped bring some certainty and stability for businesses and individuals alike. That hadn’t been the case for several years, when the passing of the extender bill spilled into mid- to late December and only was for a one- or two-year period, said Cory Van Deusen, a partner at Lumsden McCormick CPAs.
In fact, he remembers a few years ago when the extender bill was passed in the first week of January. And most of the plans in recent years merely extended the entire allotment of provisions through a predetermined future date, only to expire again and lead to the same last-minute negotiations.
Initially, an increased number of tax reductions were passed to stimulate the economy, but most were never made permanent. Although there is now a better sense of understanding among clients of how this process works, Van Deusen said it hasn’t made it any easier to plan.
“While they’re frustrated, they can actually deal with it,” he said, prior to the extender agreement being announced. “But the first year or two, it was tough explaining to them the situation.”
Read the full Buffalo Business First's Buffalo Law Journal article here.
Download an overview of the 2015 PATH Act:
