Taxes
Expired Tax Cuts Get Another Chance
Senate Finance Committee Chairman Chuck Grassley is urging fellow Senators to quickly pass a series of expired tax cuts. Grassley says that without the legislation, taxpayers will face confusion and compliance problems.
The deductions in question expired at the end of 2005, though most taxpayers are unaware of the expiration. They include the state and local sales tax deduction, the deduction for college fees and the teacher deduction for classroom items purchased.
According to Grassley, the provisions effect 8.6 million taxpayers.
The tax cut extensions were left out of the tax cut bill passed in May. They were recently included in the "trifecta bill" that included estate tax cuts and a minimum wage increase, which failed to pass Congress. While the measures in question have broad bi-partisan support, Democrats would not support the inclusion of estate tax cuts in the bill.
Grassley is concerned about the passage of these popular deductions.
"Six weeks have passed since the Trifecta was last considered, and my concern for the millions of families and individual taxpayers who regularly claim the benefits of this tax relief has grown," he explained.
He continued to say that a delay beyond the September recess date will cause "hardship, tax compliance problems and confusion." Congress will likely return in mid-November after mid-term elections.
Part of Grassley's concern centers around the printing of the 2006 tax forms. As of now, the 2006 draft of the forms do not include the expired tax provisions. The finished version must be to the printing companies by November 7, 2006 for tax form packages to be mailed on time. In order to provide time for changes to be prepared, the law must be finalized by October 15.
If they are not extended in time, the IRS will have to issue supplemental instructions on how to enter the deductions as write-in entries. This often causes taxpayer errors and could lead many to not claim a deduction for which they are eligible, Grassley warned.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! |
Martin Lukac
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