According to the congressional Joint Committee on Taxation, 77 tax deductions, tax credits and other tax-saving laws expired on Dec. 31, 2011. The most popular deductions for individuals are state and local sales tax deductions and the college tuition and fee deductions. Companies are also seeing some of their favorites expire like the 100 percent bonus depreciation option and the larger Section 179 write-off for some equipment. For some companies, the expiration of R&D credits is also huge.
A lot of Capital Hill observers think many of the above will be extended eventually, but obviously that makes planning much more difficult. In the linked article above from Bankrate blogger Kay Bell (who is also a great Twitter follow @taxtweet), JMF shareholder and co-manager of the tax department Janet Moore was quoted as follows, “I’m not very optimistic that anything will happen (with extenders’ renewal) until after the election, and then probably not until the end of December.”
Moore continued, “We have to plan assuming that those items will be extended. That means we watch very closely as the legislative process proceeds to determine what will happen.”
What’s that mean to you?
More tax uncertainty, which means more difficult planning. Difficult planning should not be confused with an excuse for doing no planning!