Retroactive Tax Law Changes for 2014

Michael Wiener, E.A.

Michael Wiener, E.A.

by Michael Wiener, E.A.

Following the passage of the extenders legislation, the Internal Revenue Service announced the anticipated opening of the 2014 filing season in January. The IRS began accepting individual tax returns electronically on January 20, 2015. Paper tax returns began processing at the same time.

Business returns should begin process around February 15, 2015. The decision follows Congress renewing a number of “extender” provisions of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014.

The final legislation was signed into law Dec 19, 2014. IRS Commissioner John Koskinene stated “We have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems.”

Here are many of the “extenders” that have been retroactively extended through December 31, 2014. The main change on most of these is merely the expiration date of the item:

  • Educator deduction – Educators were allowed an adjustment to gross income of up to $250 for unreimbursed classroom expenses.
  • Tuition deduction – The above the line deduction for qualified tuition and educational expenses has been reinstated.
  • Exclusion of cancellation of debt income from a qualifiedprincipal residence. This provision is especially important forthose taxpayers suffering from the effects of foreclosure, shortsales, and so forth of their principal residence.
  • Mortgage insurance premiums treated as qualified residence interest
  • State and local sales tax deduction – Especially applicable toFlorida residents because there is no income tax.
  • IRA distributions can again be made directly to a qualified charity
  • 15-year straight line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements,and qualified retail improvements are reinstated
  • Bonus depreciation (including the higher $8,000 listed vehicle limitation)
  • Section 179 expensing – The $500,000 level including up to$250,000 for qualified real estate improvements, off-the-shelfsoftware, and the ability to amend or revoke a claim• Built-in gain tax recognition period for S corporation will remain five years
  • Credit for non-business energy property
  • Employer wage credit for employees who are active duty members of the uniformed services

At this time it should be noted that these provisions apply retroactively through December 31, 2014 only. Whether these provisions will again be extended or expire remains to be seen.

In future issues I will discuss upcoming tax legislation that will pertain to the 2015 tax year. I welcome any questions or comments.

Please feel free to give me a call.

If you should have a topic that you would like me to
discuss or if you should have a question, please feel free to
call 239.403.4410 or e-mail me at

An enrolled agent, licensed by the US Department
of the Treasury to represent taxpayers before the IRS
for audits, collections and appeals. To attain the enrolled
agent designation, candidates must demonstrate expertise
in taxation, fulfill continuing education credits and adhere
to a stringent code of ethics.

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