The Tax Relief and Health Care Act of 2006, H.R. 6111, extends the following provisions, retroactive to Jan. 1, 2006:
- The above-the-line deduction for qualified higher education expenses (maximum deduction of $4,000).
- The deduction for state sales tax claimed in lieu of deducting state and local income taxes.
- The research and development credit, with some modifications.
- The Work Opportunity tax credit and the Welfare-to-Work credit. For 2007, the two credits are combined with certain enhancements.
- The above-the-line deduction for teacher classroom expenses (capped at $250).
- Fifteen-year depreciation periods for leasehold and restaurant improvements (as opposed to the usual 39-year write-off period).
- Availability of Archer Medical Savings Accounts. Contributions for health-care expenses may be deducted; qualified distributions are tax-free.
- The expanded deduction for scientific property and computer equipment donated to education institutions or other qualified charities.
Finally, H.R. 6111 also contains several provisions designed to improve Health Savings Accounts (HSAs). Significantly, the bill would repeal the annual plan deductible limitation on HSA contributions.
We’ll report on the “new, improved” HSA in a coming issue.
- Small Business Tax Deduction Strategies No matches