The Protecting Americans From Tax Hikes Act Of 2015

Financial PlanningMarket Update

, The Protecting Americans From Tax Hikes Act Of 2015Over the weekend, the President signed The Protecting Americans from Tax Hikes Act of 2015. The Act is a culmination of recent work done in both chambers of Congress that renews and makes permanent several important tax incentives.

Among the incentives, the popular Qualified Charitable Distribution (QCD) was extended. The QCD gives individuals at least 70½ years of age the ability to exclude from gross income direct transfers from Individual Retirement Accounts (IRAs) of up to $100,000, per taxpayer, to qualifying charities.

IRA account holders over 70 ½ years old will have until the end of 2015 to make a QCD for 2015.  Please contact Ambassador Advisors, ASAP, if you would like to make a Charitable Distribution from your IRA for 2015.

Other provisions made permanent are:

  • The Enhanced Child Tax Credit (CTC) – A $1,000 tax credit for each child under the age of 17. To the extent that the CTC exceeds the tax payer’s tax liability, the tax payer is eligible for a refundable credit equal to 15% of earned income in excess of $3,000.
  • The Enhanced American Opportunity Tax Credit – The American Opportunity Tax Credit takes those permanent provisions of the Hope Scholarship and increases the credit to $2,500 for four years of post-secondary education, as well as increases the beginning of the phase-out amounts to $80,000 (single) and $160,000 (married).
  • Section 179 Expensing – The Section 179 provision permanently extends the small business expensing limitation and phase-out amounts to the thresholds of $500,000 and $2 million, respectively.

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