But don't settle down on the couch with your popcorn just yet. The feature legislative presentation is still a ways off.
Although Senators agreed yesterday (May 13) to consider the package of 52 (out of 55 or so) tax business and individual tax breaks that expired at the end of 2013, final passage is not a sure thing.
And even if it clears the Senate this week, the House isn't likely to consider the bulk of the tax breaks until late fall.
Tax breaks at stake: I know this is old news, years old in fact (hence the Bill Murray movie reference), so I'll keep it as short as possible.
By now even nontax geeks know the key provisions that affect individual returns:
- above-the-line deductions for educators' out-of-pocket expenses and college tuition and fees;
- itemized deductions for state and local sales taxes and private mortgage insurance;
- relief from home-related forgiven debt income;
- IRA direct rollovers to charities;
- energy-efficient home improvement tax credit; and
- transportation breaks for mass transit commuters.
Congress must reinstate these and the rest of the expired tax provisions for 2014 and beyond.
Timing up in the air: Most tax observers expect that to happen. The issue is when.
Most tax observers expect final approval to be delayed until after the November elections.
That means we won't get a good idea of what tax planning moves to make until it's almost too late to make many of them.
Thanks, once again, political cowards Representatives and Senators.
But the process has to start somewhere, and at least that's finally happening.
House, Senate, rinse, repeat: The House Ways and Means Committee approved a handful of business tax breaks at the end of April. One of them, the research and development tax credit, officially known as H.R. 4438 or the American Research and Competitiveness Act of 2014, passed the full House on May 9.
On Tuesday, May 13, the Senate got in on the extender action.
The upper chamber overwhelmingly agreed to consider the more complete version of the extenders, known as the EXPIRE Act, that the Senate Finance Committee approved back on April 3.
To comply with the constitutional requirement that all tax matter originate in the House, the Senate extenders were tacked on as an amendment to the previously passed House measure H.R. 3474, Hire More Heroes Act.
Once the amended version of the House bill passes the Senate, it goes back for the Representatives' reconsideration.
And that's where things get sticky.
Politics, policy and price hurdles: In addition to the politics of taxation, legislative approaches and financial concerns also are expected to slow the extenders' progress.
Rep. David Camp (R-Michigan), chair of the tax-writing House Ways and Means Committee, wants to consider the extenders in a more deliberate fashion.
He also would like to make permanent those tax breaks that pass muster so Congress and taxpayers won't have to watch this same old tax movie every year or so.
Hence the half-dozen Ways and Means approved business tax breaks, one of which has so far cleared the full House.
So Camp is not expected to look favorably on the Senate's proposal to send the bulk of the extenders back for a quick once-over and OK for a couple of years.
Plus, some Senators are not happy with limits on amendments they will be allowed to make to the bill when it comes up for full debate.
Sen. Orrin Hatch (R-Utah), ranking Republican on the Senate Finance Committee, said Tuesday that his party is being mistreated by Democrats refusal to allow them to tweak the bill. So, said Hatch, the GOP may retaliate by blocking the entire measure.
Yes, America. Your lawmakers act like junior high students with hurt feelings way too much of the time.
It's always about the Benjamins: Then there's the money.
President Obama already has threatened to veto the R&D tax credit because its $156 billion cost is not offset by money from other taxes or loophole closures.
He has, however, not gone as far when it comes to the full Senate package, which also is unpaid for. The 52 extenders in the Senate version will add around $85 billion to keep the tax breaks in place through 2015.
Camp issued a statement in response to the veto threat, noting that "tax extenders have historically not been paid for. In fact, in both 2006 and 2008, then-Senator Obama voted to extend the R&D tax credit without paying for it. And, in 2010 and 2013 he signed into law unpaid-for extensions of tax extenders."
Will deficit hawks, primarily in the House, use cost to fight for or against individual extenders? Maybe.
But we probably won't see which ones will make it back into the tax code or for how long until the extenders get an encore showing later this year.
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