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 The Protecting Americans From Tax Hikes Act of 2015 (PATH Act) was signed by President Obama on December 18, 2015.  The Act extends for at least 2 years many of the more than 50 tax provisions that expired at the end of 2014.  The Act also makes at least 20 key provisions permanent and many of the provisions have been modified and expanded.  Below is a summary of selected provisions of the PATH Act.

Items that were “Permanently” Extended

1.      Section 179 Limits Increased and Expanded.  Items reinstated retroactively for 179 property placed in service in tax years beginning after 2014.

a.      $500,000 annual deduction limitation.

b.      $2,000,000 phase out threshold

c.      Air conditioning and heating units may qualify for the 179 deduction if the units are not structural components of a building.  For tax years beginning after 2015.

2.      Permanent extension of 15-year straight line cost recover for Qualified Leasehold Improvement Property, Qualified Restaurant Property, and Qualified Retail Improvement Property.

3.      American Opportunity Tax Credit was made permanent.

Items that were extended through 2019

1.      50% Bonus Depreciation reinstated retroactively for qualifying property placed in service after 2014 and before 2018.

2.      Substitution of “Qualified Improvement Property” for “Qualified Leasehold Improvement Property” for property placed in service after 2015.

The IRS has also increased the De Minimis Safe Harbor Deduction amount for Businesses without an applicable financial statement from $500 to $2,500.  This will take effect for costs incurred during taxable years beginning after 2015.

This is just a brief summary of select provisions of the massive tax package that was signed into law.  If you have questions about other areas please let us know and we can address them.

Thank you!