Tax News: February 23, 2016

Oregon Kicker!
Individual taxpayers are benefiting on their 2015 tax returns from a refundable kicker credit equal to 5.6% of their 2014 tax liability before credits (other than credits for taxes paid to other states).   Taxpayers can choose to donate the credit to the Oregon State School Fund if they wish.   Note – even if you are not required to file a 2015 return, you have to file to receive your kicker refund.
Oregon Personal Property Tax Return Due Date
Personal Property Tax Returns have a new filing date of March 15th, 2016 with no opportunity to file a request for an extension.   Returns filed after March 15th will be assessed a penalty.
Follow up on Extenders Legislation News Briefing
We previously reported on the most pressing provisions of the extenders bill (aka PATH act) enacted in December of last year.   Here’s a list of some other important components of that legislation which deserve mention :

  • Beginning in 2016, heating and air conditioning units qualify for the section 179 deduction.
  • While bonus depreciation was retroactively extended for “qualified leasehold improvement property” for 2015, a less noticed provision changes the eligibility rules going forward.   For property placed in service after December 31st 2015, qualified improvement property (QIP) rather than qualified leasehold improvement property (QLHIP) qualifies for bonus depreciation.  QIP is defined as any improvement to the interior of non-residential real property as long as the improvement is placed in service after the building was first placed in service (by anyone).  Like QLHIP, qualifying expenditures don’t include enlargements to a building, elevators or escalators, or amounts related to the internal structural framework of a building.   Significantly though, unlike QLHIP, QIP does not have to be placed in service more than 3 years after the building was first placed in service, does not exclude expenditures related to common areas,  and does not have to be related to a lease.  Note – QLHIP continues to be 15 year property while QIP is 39 year property.
  • Effective for returns required to be filed in 2017, the due date for filing forms W-2, W-3, and returns reporting non-employee compensation (such as form 1099-MISC) with the IRS is accelerated to January 31st.
  • Effective for gifts after December 18th, 2015, the gift tax does not apply to contributions to 501(c)(4) social welfare organizations, 501(c)(5) labor organizations, or 501(c)(6) business leagues.
  • Effective December 19th, 2015, rollovers are allowed from a multitude of retirement plans to a SIMPLE retirement account.
  • Several enhancements were made to section 529 accounts:
    • Computer equipment and technology now qualify for tax-free distributions if used primarily by the beneficiary during years he/she is enrolled at an eligible educational institution.
    • Refunds of tuition paid via 529 distributions are treated as a qualified expense if re-contributed to a 529 account within 60 days of the refund.
    • The distribution aggregation requirements for multiple 529 accounts have been eliminated.

As always, we are here to help.  Please let us know if you have any questions about the above or about your tax situation in general.
Zirkle, Long & Associates, LLC