PATH Act – Updates for 2016 and Beyond

The President has signed the Protecting Americans from Tax Hikes (PATH) Act which extends numerous tax provisions. Some important tax provisions have been made permanent, while others were extended through 2016 or 2019. The PATH Act also adds in other miscellaneous provisions to combat erroneous education credit, child tax credit and earned income tax credit claims. Some of the most notable provisions include:

  • A permanent extension of the $500,000 §179 limit.
  • An extension for bonus depreciation through 2019.
  • A permanent extension of the general state and local sales tax deduction.
  • A permanent extension of the $250 educator expense deduction.
  • An extension for the exclusion from the cancellation of debt of qualified principal residence indebtedness through 2016.
  • The research credit.
  • A requirement that a tax preparer exercise due diligence, similar to the earned income tax credit, for the American opportunity tax credit and child tax credit, with similar penalties for failure to do so.
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