Signed into law on December 19, 2014, the Tax Increase Prevention Act of 2014 took effect on January 1, 2015. The Act amends the Internal Revenue Code by extending a number of tax deductions and credits available to individuals and businesses alike that were set to expire. Although the legislation had drawn the attention of accountants and other professionals as it worked its way through Congress over the past couple of months, the fact that its passage and impact has so far gone largely unnoticed by most is likely attributable to the busyness of the Christmas season. Whatever the reason, if you haven’t heard much about the Act, here are some highlights that may be of interest to you or your business:

For individuals, the Act extends through 2014 such things as the tax deduction for expenses of elementary and secondary school teachers and others for materials purchased for use in the class room; the tax exclusion of imputed income from the discharge of indebtedness for a principal residence; the tax deduction of mortgage insurance premiums; the option to take an itemized deduction for state and local general sales taxes in lieu of state and local income taxes; the tax deduction of contributions of real property interests for conservation purposes; and, the tax exemption for distributions from individual retirement accounts for charitable purposes.

For businesses, the Act extends through 2014 such things as the tax credit for research activities; the low-income housing tax credit rate for newly constructed, non-federally subsidized buildings; the tax credit for differential wage payments to employees who are active duty members of the Uniformed Services; the work opportunity tax credit; accelerated depreciation of certain business property (bonus depreciation); and the 100% exclusion from gross income of gain from the sale of small business stock.

The Act also extends a number tax provisions, deductions and credits, specifically applicable to the energy sector.

The text of the Act, along with its legislative history and a summary of its provisions, can be found on the Congressional website. Additional information can also be found by using key word searches for such things as: “tax increase prevention act 2014” or “tax extenders bill.”

For those of you who use commercially available software to prepare your own tax returns, and, especially for those who like to file early, you will need to make certain that your software has been updated to reflect these extensions.