Summary of 2015 Tax Extenders affecting Individuals

Qualified Tuition and Related Expenses

The American Opportunity credit has been made permanent. This tax benefit allows up to $2,500 tax credit per qualifying student. The tuition and fees deduction was not made permanent; instead was extended through 2016. The tuition and fees deduction may provide an alternative tax benefit through a reduction of taxable income by up to $4,000. These education tax benefits are subject to income limitations.

Nonbusiness Energy Property Credit

A Credit for taxpayers who make energy efficient improvements to their principal residences through 2016. The credit is 10% of the cost of the qualifying improvements, not to exceed a lifetime limit of $500 ($200 for windows).

Deduction for State and Local Sales Taxes

This deduction has become permanent. This deduction allows taxpayers to deduct the greater of the state income tax or sales tax they pay each year. This provision will have its greatest impact on taxpayers living in states that do not impose a state income tax such as Florida and Texas.

The enhanced Child Tax Credit

To the extent the CTC exceeds the taxpayer’s tax liability, the taxpayer is eligible for a refundable credit (the additional child tax credit) equal to 15 percent of earned income in excess of the $3000.00 threshold dollar amount. The $3000.00 threshold amount has become permanent.

Other Tax Extenders

A classroom-expense for certain educators of $250 with an incremental adjustment by a cost-of-living calculation beginning after tax year 2015.
Exclusion from income for employer-provided mass transit and parking benefits up to $175.
Tax-free distributions from individual retirement accounts of taxpayers age 70 ½ or older to qualifying charitable organizations, up to $100k.
Deduction for mortgage insurance premiums as qualified interest through 2016.
The exclusion of up to $2 million of discharged principal residence indebtedness from gross income has been extended through 2016.

Please contact Hubert Pereira at 678-799-7772 for further information.