Late on Dec. 18, President Obama signed the Consolidated Appropriations Act, 2016, that not only funds the federal government for the next fiscal year but also makes permanent a number of tax "extender" provisions and temporarily renews others.
A few key tax extenders included in the act have received the bulk of the attention from media outlets and trade associations. These include significant provisions affecting business taxpayers across a wide spectrum, including banks, involving:
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For Financial Institutions
While the provisions listed above are clearly important to financial institutions, there are other, less-publicized items in the act that also may be of interest. These include:
Start of Tax Reform?
House Speaker Paul Ryan (R-WI) has been quoted as saying the act "is one of the biggest steps toward a rewrite of our tax code that we've made in many years." No doubt, all of the extenders and other tax provisions contained in the act will be subject to review in coming years if Congress proceeds with comprehensive tax reform.
In the meantime, businesses and individuals have a little more certainty as a result of the extenders made permanent and those renewed for more than the typical one or two years. In some cases, IRS guidance will be needed on how to implement the changes made by the act, particularly with respect to worker certification for the WOTC and reporting of mortgage insurance premiums on the 2015 Form 1098.
For more on how the Appropriations Act affects you or your financial institution, do not hesitate to call your local Eide Bailly tax professional.