Tax Year 2015: Top 10 Tax Planning Issues
As 2015 draws to a close, a turbulent economic and legislative environment means taxpayers need to keep a close eye on several major planning issues, according to Grant Thornton LLP.
For example, more than 50 popular tax provisions expired at the end of 2014 and Congress has yet to extend them. Without legislative action, businesses won’t get a credit for research activities or be able to immediately deduct one-half of the cost of new business equipment. Individuals would lose benefits like the ability to deduct tuition or state and local sales taxes.
“Congressional inaction on tax extenders is not only causing headaches for businesses, but individual taxpayers as well,” said Mel Schwarz, partner and director of tax legislative affairs in Grant Thornton's National Tax Office in Washington, D.C.
“This climate of economic uncertainty is already making business and investment planning difficult, and Congress isn’t offering much help,” added Dustin Stamper, director in Grant Thornton’s Washington National Tax Office.
While lawmakers did manage to enact several pieces of tax legislation this year, that’s not necessarily good news – the most significant provisions are all tax increases. Congress attached several revenue raisers to a pair of trade bills and an even larger package of revenue raisers was used to finance a short-term extension of highway funding.
Grant Thornton’s Year-end Tax Guide for 2015 discusses these and all the issues taxpayers and taxpaying entities should be thinking about right now. Below are 10 of the most important 2015 tax planning considerations for individuals, executives and business owners. Taxpayers can also test their year-end planning knowledge with Grant Thornton’s interactive quiz.
1. Check on Congress. The most important thing you can do this year for your tax planning is to keep an eye on Congress to see whether lawmakers manage to extend popular tax provisions before the end of 2015. Some notable provisions must be extended in order to allow:
Taxpayers aged 70½ and over to make tax-free charitable contributions from individual retirement accounts (IRAs);
- Businesses to deduct up to half of eligible equipment placed in service this year;
- Teachers to receive an above-the-line deduction for $250 in classroom expenses;
- Students and parents to receive an above-the-line deduction for tuition expenses;
- Companies to receive a credit for qualified research expenses; and
- Taxpayers in states without an income tax – like Washington, Texas and Florida – to deduct state sales taxes. Read more on CPA Practice Advisor.