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Friday May 29, 2015

Washington News

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Permanent Charitable Tax Extenders Markup

The House Ways and Means staff recently shared a projected list of tax extenders for a May 29th hearing. The Ways and Means Committee has been working through the 60 tax extender provisions. Six business-related extenders were permanently passed in a prior hearing. They were then sent on for a vote by the full House of Representatives.

The next six extenders to be considered are expected to be reviewed for markup at the May 29 hearing. These include five charitable bills and one additional business-related bill.

The projected list of tax extenders for the hearing are as follows:

1. IRA Charitable Rollover – Individuals over age 70½ would be able to transfer up to $100,000 per year directly from the IRA custodian to a qualified charity.

2. Conservation Easement – Gifts of conservation easements to charities would qualify for the expanded deduction similar to cash gifts and would benefit from a 15 year carryforward.

3. Food Inventory – Gifts of food inventory by any taxpayer would qualify for an enhanced charitable deduction.

4. Delayed Charitable Gifts – A new bill permits donors to make gifts up until the April 15 deadline and deduct them for the prior year. This would move the “end of year” gift timeframe into the first part of the following year.

5. Private Foundations – The 1% and 2% excise tax system is simplified with a flat 1% excise tax on income.

6. Bonus Depreciation – The ability of businesses to deduct 50% of qualified equipment placed into service would be made permanent.

To become permanent law, all of these provisions must pass the House Ways and Means Committee, the full House and then the Senate. Speaker John Boehner (R-OH) stated that he will move most of these bills to the floor for votes by the full House in June and July. Under the methodology chosen by House Ways and Means Committee Chairman Dave Camp (R-MI), each extender to be made permanent will require a separate vote.

Editor’s Note: For the past five years, there have been about 60 tax extenders. The favorable news for philanthropy is that five major provisions are now potentially going to be made permanent. The probability is that those extenders presented to the committee and voted on will also be passed by the House. However, the Senate is still negotiating over its bill. If the Senators are able to draft an agreement on limiting amendments, the Senate bill with nearly all of the traditional extenders may pass in June. The question then will remain whether the House is willing to change from passing a small number of permanent extenders to considering a two-year extension for the full list. Given the impending election, it is becoming more and more likely that final action may be in November.

IRS Direct Pay Simplifies Tax Payments

The IRS announced this week that 150,000 taxpayers have used the “IRS Direct Pay” section of www.irs.gov. These taxpayers transferred over $340 million directly from their bank accounts to the IRS.

IRS Commissioner John Koskinen stated, “IRS Direct Pay reflects our latest effort to add more online tools to provide additional service options to help taxpayers. IRS Direct Pay simplifies the payment process, and taxpayers can make a payment from the convenience of a home computer.”

On the IRS website, a taxpayer may select the Payments option. Direct Pay is the first option. If Direct Pay is selected, then there are five steps.

  1. Enter tax information.
  2. Verify taxpayer identity.
  3. Enter payment information.
  4. Review and electronically sign.
  5. Print your payment confirmation.

The IRS Direct Pay system enables you to make a transfer directly from your bank account to the IRS at any time. The banking information is transferred with a secure and encrypted internet method. The IRS does not retain the bank information after the payment is complete.

Published May 23, 2014
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