This extended tax season will undoubtedly be remembered as one of the busiest in the history of our company. The impact of the Tangible Property Regulations has in part, contributed to the extraordinary number of clients who filed their returns on an extended basis, waiting until the absolute last minute to engage consultants to evaluate opportunities in conjunction with TY 2104 filings.
We at Bedford have never been so busy and most of our CPA clients share the same sentiment. Traditionally, the summer has represented “down time” when our engineers can take some vacation time and when we at the corporate headquarters, focus on process improvement, new service development, refinement and an overall “re-tooling” of our company.
The combination of market conditions and awesome, loyal clients has required us to look at this summer in a much different way. It has been “all hands on deck” for the past two months as we responded the needs of our CPA and property owner client base. I would like to thank you for the continued support and confidence in the Bedford Team.
Even though we have been extremely busy, we have been keeping a close eye on some pending legislation that will have a material impact on our clients. Here is a summary of what is pending:
H.R. 880 – America Research and Competitiveness Act of 2015
On May 20th 2015 the House of Representatives passed bill H.R. 880 formally known as the American Research and Competitiveness Act of 2015. This bill revises and makes permanent after 2014 the Research and Development tax credit.
If passed, this bill would change the formula for calculating the amount of a research credit, increases the credit rates, eliminates the historical method for fixed base, and allows for eligible small businesses to claim the credit against an AMT liability.
The bill would eliminate what many currently consider to be one of the largest deterrents from the application of the R&D credit, by using a three year rolling average calculations as well as other “ease of use” provisions. Additionally the bill would increase the first year credit from 6% to 10%.
Extension of Bonus Depreciation and Other Incentives.
The Senate Finance Committee recently approved a two year extension (2015 and 2016) of virtually all the provisions that expired on 12/31/14. Generally, this bill if approved by Congress will extend among others Bonus Depreciation, Qualified Leasehold, Restaurant and Retail Property treatment as well as various energy incentives under 179D and 45L. The full Senate has yet to approve the bill as reported out of the Senate Finance Committee.
The House Ways and Means Committee has approved two Bills relating to tax extenders. One bill, HR 765, makes permanent the 15-year life for Qualified Improvement Property (formerly Qualified Leasehold Improvements), Qualified Restaurant Property and Qualified Retail Property. The second bill, HR 2510, makes permanent bonus depreciation at the 50% rate. We will continue to monitor this pending legislation and keep you informed.