HAPPY TAX YEAR!
January 5, 2010
While millions of Americans are more than ready to put 2009 behind them, they should know that Congress failed to reauthorize dozens of tax breaks for individuals and businesses before the Members scurried home for the Holidays. These “expiring provisions” affect every American in one way or another as individuals or businesses. By allowing them to lapse, Congress has enacted tax increases at time when these taxpayers can least afford it, says the Heritage Foundation.
The House has passed legislation (H.R. 4213) that would have extended 63 current tax provisions, but the Senate failed to bring this bill to a vote. Thus, all of these provisions expired at midnight on December 31, 2009. Notable provisions include:
* Deduction of state and local general sales taxes (section 164) (Personal Tax Incentives).
* Additional standard deduction, up to $500 for individuals and $1,000 for couples, for state and local property taxes (section 63) (Personal Tax Incentives).
* Research tax credit and alternative simplified credit (section 41) (General Business Tax Incentives).
* New markets tax credit (section 45D) (Community Assistance Provisions).
* Empowerment zone incentives (sections 1391 and 1202) (Community Assistance Provisions).
* Renewal community tax incentives (sections 1400E, 1400F, 1400I, and 1400J) (Community Assistance Provisions).
Although the House has acted and passed its version of the Tax Extenders Act of 2009, the Senate failed to act on similar legislation, as a result the following additional key tax provisions will expire, says Heritage:
* Increased exemption levels for the individual alternative minimum tax (section 55) and personal tax credits allowed against the AMT (section 26).
* Exclusion of unemployment compensation benefits from gross income (section 85).
* Alternative fuel mixture tax credit (section 6426(e)).
* Reduced estimated tax payments for small businesses (section 6654(d)(1)(D)).
The Senate has had a lot on its plate this year. But it is still unacceptable that they have stalled on the chance to extend these tax provisions that affect every American. By allowing these tax provisions to expire, taxes will rise on many individuals and businesses, and for some of these groups, a punitively steep tax hike, says Heritage.
Source: John Ligon, “Happy Tax Year!” Heritage Foundation, January 1, 2010.