Actually, that's good news. It at least means that people are talking taxes.
The big issue is whether to do away with some of the extenders, the name given the technically temporary tax breaks that must renewed periodically by the House and Senate.
Wait! Don't freak out.
The tax provisions wouldn't be eliminated. They just wouldn't be extenders. Instead, they would become permanent parts of the tax code.
Permanent tax trade-offs: That's what a lot of lawmakers, especially outgoing Ways and Means Chairman Dave Camp (R-Mich.), want. And he's reportedly made some progress in talks with outgoing Senate Majority Leader Harry Reid (D-Nev.) in this regard.
The key provisions on the permanent list include the research and development tax credit for business and, for individuals, the state and local sales tax itemized deduction, along with some tax breaks that help students and their families pay for college costs.
It's not clear whether the Capitol Hill negotiators are talking about the above-the-line adjustment for college tuition and fees that expired in 2013 or looking ahead to the American Opportunity tax credit that ends on Dec. 31, 2017.
Democrats vs. Republicans on tax policy: Some other extenders that are safe for a few more years also are making it into the discussions.
Reports are that in exchange for the permanent business tax relief being pushed by Republicans, Democrats want the Earned Income Tax Credit's expanded provisions, which also end at the end of 2017, to be permanent, too.
In addition, Democrats are seeking to expand the $1,000 child tax credit. That popular tax break itself became a permanent part of the Internal Revenue Code when the American Taxpayer Relief Act, aka the fiscal cliff bill, became law on Jan. 2, 2013.
So the political and philosophical party divides are causing some tax problems as the lame duck session winds down.
Positive tax outlook: I'm trying to stay optimistic, or partially so. I tend to believe that we'll get the tax action we've gotten for the last decade: retroactive approval for the fast fading tax year and then a one- or two-year extension of the all the current tax provisions.
Maybe I'll be wrong (don't tell the hubby I said that, even if it is a legislative/tax-specific admission!). Maybe several of the extenders will become permanent tax laws, even leading to further discussions about overall tax reform.
I could live with having a foggy crystal ball in this case if it means we get some additional certainty in our tax code.
What do you think? Will Congress take baby steps or large strides when it comes to the extenders in the next few weeks?
And which expired tax breaks, which I discuss in my Bankrate story published earlier this month as well as in my many, many extenders posts here on the ol' blog, are the most crucial to you, both for the 2014 tax year and beyond?
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