Albrette "Gigi" Ransom
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Reported by La Verne Amigo
US citizens are anticipating having more tax money to spend as US President Barack Obama made the H.R. 5771 law official, known as the Tax Increase Act Prevention.
H.R 5771 is a law that amended the 1986 Internal Revenue Code to give an extension and technical correction of some provisions pertaining to the energy sector, individual taxes, and taxes paid by businesses, retroactive Jan. 1, 2014.
Taxpayers are happy with the prospect of having money during the scheduled tax payments on April, considering that some of the tax extenders are retroactive, which means that some might not pay any taxes at all while others can receive refunds.
Business establishments will enjoy another year of credits for research and development and the depreciation of bonuses while around 50 tax extenders will be given to individual taxpayers.
Under individual tax extenders, teachers will receive tax deductions for their expenses from materials used in teaching. Other items that are tax deductible are premiums paid for insurance and mortgage, taxes for general and local sales, qualified tuition and other related expenses, individual retirement account distribution, interests for conservation of real estate property, and travel and parking expenses provided by employers. Once they pay for discharge of mortgage of their residence, their gross income can be deducted with up to 2 million dollars.
Tax deduction for tuition fees has been greatly welcomed by parents and students because of the huge amount of money spent on education that used to be included in computing individual taxes and is now included in tax deductions.
Businesses will be allowed tax deductions if they engage in research activities and low cost housing construction. Small businesses will be excluded from paying taxes.
Energy tax extenders will be given for production of renewable energy and energy efficiency of commercial buildings, homes, etc.
In short, commuters, teachers, businessmen, and people who support renewable energy and green programs of the government will get reprieve from high taxes as their tax deductions will be counted from December 2013 to December 2014.
These changes will take effect on the next tax payment schedule, and tax payers will see the breakdown in the computation of their taxes for 2014.
H.R. 5771 was passed into law on December 16, 2014. While many citizens were hoping for a longer extension, only one year was approved, covering the period from December 31, 2013 to December 31, 2014.
