Pit & Quarry, February 2015

BUSINESS line deduction for energy efficient commercial buildings Last year business owners who built or renovated property featuring renewable energy technology such as solar panels or green lighting equipment could take advantage of a special tax deduction Until this bill became law the deduction could only be claimed on property placed in service before the end of 2013 Now any such property opened in 2014 would qualify for the deduction as well More extended deductions There are of course many far narrower provisions included in the Tax Increase Prevention Act including tax breaks for film and theater producers NASCAR racetrack owners racehorse owners and rum producers in Puerto Rico and the Virgin Islands Among the other provisions applying to businesses that have been extended are the already mentioned Extension of mine rescue team training credit Extension of election to expense mine safety equipment The often overlooked research tax credit The new markets tax credit Tax incentives for empowerment zones An employer wage credit for activated military reservists The extension of basis adjustment to stock of S corporations making charitable contributions of property Low income tax credits for new bui ldings not federally subsidized Indian employment credit and accelerated depreciation on Indian reservations S corporation charitable donation of property Production tax credit Biodiesel and renewable diesel tax credit Other energy tax credits and deductions Changing your mind about taxes Under the new law these extenders are for the 2014 tax year only Obviously coming this late in 2014 leaves little time for planning and may in fact require changes to already filed 2014 tax returns Fortunately once an aggregates producers tax returns have been filed changes can be made on an amended tax return Generally an aggregates business or its owner can change their mind about previously reported income and missed deductions within The extension of the energy efficient commercial buildings deduction allows an above the line deduction for such buildings three years from the time the return was filed or within two years from the time the tax was fully paid whichever is later Individuals sole proprietors and others use Form 1040X Amended Individual Tax Return A corporation that filed Form 1120 uses Form 1120X Amended U S Corporation Income Tax Return to file an amended return while S corporations and partnerships check a box on the Form 1120S or Form 1065 Money now returns later Uncle Sam in the form of the Internal Revenue Service IRS usually wants its money sooner rather than later a requirement that usually means pre paying estimated tax bills or fully paying their expected tax bill on or before the deadline either March 15 or April 15 for those businesses and individuals using a calendar year Today however aggregates producers and other businesses can delay filing their 2014 tax return with little worry about the IRS strict pre payment rules Using Form 4868 Automatic Extension of Time to File a U S Individual Tax Return an individual can obtain an automatic six month extension of time to file tax returns Incorporated aggregates producers may obtain the automatic six month extension of time to file income tax returns by submitting Form 7004 Application for Automatic 6 Month Extension of Time to File Certain Business Income Tax Information and other Returns The automatic six month extension of time to file also applies to the returns of pass through entities such as partnerships S corporations and limited liability companies While the Form 7004 does not extend the time for payment of tax the Tax Increase Prevention Act of 2014 is all about reducing a sand gravel or crushed stone operations tax bill Tomorrow While lawmakers touted the tax credit for research and development expenditures and an exemption that allows financial companies such as banks and investment firms to shield foreign profits from U S taxes as among the biggest tax breaks several provisions allow aggregates producers and other businesses to write off capital investments more quickly For 2014 50 percent bonus depreciation is back and the dollar limits for Section 179 expensing are way back up at 500000 with a 25 million investment ceiling However on Jan 1 2015 bonus depreciation disappeared again and Section 179 became way less powerful reverting to a 25000 limit with a 200000 investment ceiling Of course renewing the extenders only through the 2014 tax year means Congress will have to deal with them again perpetuating a long standing routine of annual reconsideration of the package Until then will your aggregates business reap the reward of a lower tax bill thanks to the Tax Increase Prevention Act of 2014 P Q Mark E Battersby is a freelance writer who has specialized in taxes and fnance for the last 25 years 58 PIT QUARRY February 2015 www pitandquarry com