WASHINGTON — In an almost annual ritual, Congress is letting a package of 55 popular tax breaks expire at the end of the year, creating uncertainty — once again — for millions of individuals and businesses.
Lawmakers let these tax breaks lapse almost every year, even though they save businesses and individuals billions of dollars. And almost every year, Congress eventually renews them, retroactively, so taxpayers can claim them by the time they file their tax returns.
No harm, no foul, right? After all, taxpayers filing returns in the spring won’t be hurt because the tax breaks were in effect for 2013. Taxpayers won’t be hit until 2015, when they file tax returns for next year.
Not so far. Trade groups and tax experts complain that Congress is making it impossible for businesses and individuals to plan for the future. What if lawmakers don’t renew the tax break you depend on? Or what if they change it and you’re no longer eligible?
“Right now, we handle a number of tax policies with short-term extensions, which means dealing with expirations every few years,” said Rep. Randy Neugebauer, R-Lubbock. “The problem with that is that it doesn’t give families and businesses much certainty to plan ahead. The solution is long-term, comprehensive tax reform that closes loopholes and makes the process simpler. I’m working toward a more open, transparent system that gives people a fair deal.”
The current plan isn’t too popular with some in the industry.
“It’s a totally ridiculous way to run our tax system,” said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation. “It’s impossible to plan when every year this happens, but yet business has gotten used to that.”
Some of the tax breaks are big, including billions in credits for companies that invest in research and development, generous exemptions for financial institutions doing business overseas, and several breaks that let businesses write off capital investments faster.
Others are more obscure, the benefits targeted to film producers, race track owners, makers of electric vehicles and teachers who buy classroom supplies with their own money.
Jimmy Stallings, general manager of Gene Messer-Ford, said this time of year normally constitutes a high volume of sales for them — commercial and fleet vehicles included — but he couldn’t directly relate it to the expiring tax break since it’s a normal occurrence for the business.
“A lot of times accountants, CPAs, financial advisors will tell their clients buy it now before the first of the year,” he said.
He explained that it doesn’t matter what month businesses buy a vehicle in, they…Continued here: http://lubbockonline.com/business/2013-12-30/uncertainty-looms-tax-breaks-expire-years-end#.UsY-P7SwBcp