Client Tip for March 2016: PATH Act – Individuals
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) made permanent several key individual extenders. Some of the more popular provisions include:
- State and Local Sales Tax Deduction: This is the election to claim an itemized deduction for state and local sales taxes, in lieu of deducting state and local income taxes.
- American Opportunity Tax Credit: This is the enhanced education credit that allows some taxpayers up to $2,500 in tax credits.
- Section 529 Plans: The PATH Act made the purchase of computer equipment and technology items with a distribution from a Section 529 Plan to be considered a qualified expense.
- Classroom Teacher Expenses: Extends the above-the-line deduction for elementary and secondary school teachers’ classroom expenses.
- Charitable Distributions from IRAs: Makes permanent the provision for individuals age 70 ½ and older to be allowed to make tax-free distributions from IRA accounts to a qualified charitable organization.