The Senate Finance Committee passed a tax extenders bill Tuesday with a bipartisan vote of 23 to 3 that extends over 50 tax breaks for two years.
“Today the Finance Committee advanced a bipartisan bill aimed to help both families and businesses,” said committee chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., in a joint statement. “By allowing committee members to work their will, the committee succeeded in passing a number of widely supported tax provisions that will provide some certainty in the tax code for the next two years. We look forward to continuing to work together in a bipartisan fashion to enact tax extenders legislation.”
The bill would extend dozens of tax breaks that expired at the end of last year (see Senate Finance Committee Prepares Tax Extenders Bill). Last December, Congress only managed to extend the tax breaks for an extra two weeks through the end of the year and retroactively for the rest of 2014, allowing tax season to proceed this past tax season without new forms needing to be created by the IRS.
The bipartisan tax extenders package includes provisions to assist families, individuals and small businesses, and incentivize research and development, along with other provisions. Among the more popular provisions are the $250 above-the-line tax deduction for teachers and other school professionals for expenses paid or incurred for books, supplies, mortgage debt relief, parity for employer-provided mass transit and parking benefits, the deduction for mortgage insurance premiums, the deduction for state and local general sales taxes, special rules for contributions of capital gain real property made for conservation purposes, the above-the-line deduction for higher education expenses, tax-free distributions from individual retirement plan for charitable purposes, and the research and experimentation tax credit.
“All of these tax provisions are meant to be incentives—they are meant to encourage and promote certain activities,” said Hatch. “If they are expired, they aren’t doing much good. That being the case, we need to move this package forward as soon as possible. This package of extenders includes provisions that will assist hardworking families, individuals, and small businesses. While some tend to write off tax extenders as special-interest giveaways, in terms of dollars, the bulk of the extenders in this package go toward very popular, widely applicable provisions. To be exact, 51 percent of the dollars at play in this bill can be attributed to the following provisions: the research and development tax credit, small business expensing, the state and local sales tax deduction, bonus depreciation, and active financing income.”
“These temporary tax provisions are nobody’s idea of perfect economic policy,” said Wyden. “If each member of this committee was made king or queen for a day and wrote their own bills, you’d likely wind up with 26 different products. But the reality is, there are economic priorities in this bipartisan package that are vital to families, businesses and communities in Oregon and across the country. With the understanding that our long-term goal is a tax code overhaul that works for all Americans, Congress needs to get these provisions back in place.”
The package also includes extenders for various energy-related tax breaks, including for wind energy, biodiesel and ethanol.
“Certainty and predictability in tax policy are necessary so businesses can plan and invest accordingly, which is important for job creation,” said Sen. Chuck Grassley, R-Iowa, who had pushed for inclusion of the tax incentives for wind energy, biodiesel and cellulosic ethanol. “The Finance Committee leaders deserve credit for getting the ball rolling on extending these tax provisions. The energy items not only help support jobs. They also support the renewable energy that consumers want for a cleaner environment and energy independence. The higher education deduction helps families and students afford college.”
The American Institute of CPAs praised the Senate panel for advancing the tax extenders package.
“The AICPA commends Senate Finance Committee chairman Orrin Hatch and ranking member Ron Wyden for their leadership in acting on a tax extenders bill today that would restore more than 50 expired provisions in the tax code,” said AICPA vice president of taxation Edward Karl in a statement. “The AICPA has pressed Congress for years to provide taxpayers with certainty about the extenders, on which Congress too often doesn’t act until the end of the year. A successful conclusion to this year’s earlier start would help millions of Americans plan for and more accurately calculate their 2015 tax bill.”
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