Any chance they will be extended?
It may feel like a recurring nightmare but here we are again near the end of the year and we still do not know what the key tax provisions will be. Will the lame-duck Congress tackle the issue? Find out what you need to do to be prepared.
With the first major winter storm hitting most of the country this past week, we are reminded now is the time to think about year-end planning. And just as Mother Nature is wreaking havoc with our morning commutes, Congress is also wreaking havoc with the tax law by allowing a number of important expired tax provisions to languish over the course of the summer. The IRS Commissioner recently made several public comments warning Congress that failure to take action soon would likely delay the start of tax filing season and delay the payment of refunds to taxpayers.
Now that the mid-term elections are behind us, Congress has started to act on passing some sort of extenders bill but the path is still very uncertain. Some of the more popular business tax breaks such as the 50% bonus depreciation deduction, increased Section 179 expensing deduction and the research tax credit will very likely get extended in some form. The developing debate which threatens to delay the bill is, for how long? It’s very probable these provisions will see an extension through the end of 2015. There are a number of House members who are pushing to make these provisions permanent. This debate threatens to delay passage of the bill until early next year.
A further topic which could delay passage of the tax extenders bill are the various energy related tax incentives. The wind energy credits have long been supported by Democratic lawmakers but the recent gains by the GOP in the mid-term elections have put these provisions squarely in the target circle for possible cuts or outright repeal.
In spite of the political posturing going on in Washington, we anticipate passage of the more popular tax provisions. We may not know for certain until next year. As the tax extenders bill develops, we will keep you posted on the status of those changes.
If you have questions about tax legislation or would like assistance in determining how to make the most of your tax provisions, the tax professionals at Ciuni & Panichi can help you start planning now. For more information, please contact David Reape at 216.831.7171 or dreape@cp-advisors.com.
David Reape is Principal in the firm’s Tax Department. He has experience in all facets of taxation for individuals, closely held businesses, their owners and key personnel. His clients are in a wide range of industries, including not-for-profit, manufacturing, service, restaurants, and health care.
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