Protecting Americans from Tax Hikes Act of 2015
During Christmas week, 2017, the president signed the Protecting Americans from Tax Hikes Act of 2015 into law, thus renewing more than 50 so called "tax extenders", which have historically been temporary laws, making many of them permanent law, or extending them for two to five years. The column on the left lists some of the business related extended tax laws. This center column lists some of the individual tax return extenders. In neither list are the many criteria and rules associated with these laws shown or discussed.
Do not assume that "free" or DIY tax software will be reliable, or accurate when it comes to these tax laws, rules, and criteria. They do not, and will not address the strict rules in their entirety. A word to the wise: you get what you pay for from government provided "freeware". It is not in the IRS' or the state governments' interest to help you pay lower taxes.
Individual Provisions:
- The nonbusiness energy property credit (with a lifetime maximum of $500) is extended for 2015 and 2016.
- The child tax credit is made permanent. The maximum credit is $3,000 per child and is not indexed for inflation.
- The American Opportunity Tax Credit, which applies to various post-secondary tuition and related expenses (up to $2,500), is made permanent.
- The deduction for higher education expenses (up to $2,000 or $4,000, depending on income levels) is extended through 2016.
- The $250 deduction for out-of-pocket expense paid by educators is made permanent. After 2015, the amount will be indexed for inflation..
- The state and local sales tax deduction, which can be claimed in lieu of state income tax, is made permanent.
- The ability for taxpayers age 70.5 or older to make tax-free distributions from an Individual Retirement Account (IRA) to a charity is made permanent. The maximum amount remains at $100,000.
- The exclusion of discharge of indebtedness income from qualified principal residence debt (up to $2 million, $1 million for married individuals filing separately) is extended through 2016.
- The ability to treat mortgage insurance premiums on a qualified residence as deductible mortgage interest is extended through 2016.
In addition to the above extenders, two provisions of the Affordable Care Act are delayed for two years; the medical device tax and the Cadillac tax.