The US Senate has been under pressure this week to pass the controversial spending bill to prevent a government shutdown, however the Senate also is expected to make another big decision this week in the form of renewing tax breaks.
This week the U.S. Senate is expected to renew dozens of temporary tax breaks, known as the “extenders,” including big ones for business research, wind power and foreign profits.
But the tax breaks will not only apply to big business, ordinary citizens will be benefiting also from the tax breaks which will include the cancelling of mortgage debt, college tuition and health insurance.
According to Reuters, Senate aides said on Sunday that Senate Democratic Leader Harry Reid planned to handle some nominations first, then take up the tax bill sent over from the House of Representatives.
The House voted on Dec. 3 to renew retroactively back to Jan. 1, 2014 a 55-item package of extenders tax breaks. Most of them expired at the end of 2013 and have since been in limbo.
The renewal measure approved by the House would only be good through the end of this year. If the Senate concurs, that would mean taxpayers could claim the tax breaks for the 2014 tax year, but Congress would have to debate them all over again in 2015.
According to Reuters, “We are confident that within the next 72 hours the Senate will send a bill to the president that provides the full tranche of 55 tax credits,” said Height Securities analyst Henrietta Treyz in a research note on Monday.
It is unlikely that the Senate will change the bill as this would mean that it would need to return to the House which has already adjourned for the holiday season.
According to Reuters, yhe extenders usually win short-term renewal and extension from Congress every year or two.
Nearly half of the total 10-year estimated cost of the extenders comes from the three largest: a $7.6 billion credit for business research and development costs; a $6.4 billion tax break for renewable energy production plants; and a $5.1 billion tax exception that allows financial firms and other businesses to defer U.S. taxes on certain foreign profits.
Reuters added that another tax break, known as bonus depreciation, allows businesses to write off and deduct capital investments more quickly. Estimated to cost $1.5 billion, the tax break could cost much more if renewed again and again, critics have said.