HOME
TAX HIGHLIGHTS – SEPTEMBER 2008
In the coming months, we will post tax highlights on our website to keep you abreast of the rapidly changing tax code. As is the case in most election years, both parties are proposing changes and improvements, and the exiting administration is also trying to push through some minor changes before leaving office. So, in an effort to keep you informed we will post monthly updates to the website for your convenience and referral.
Same Breaks, Same Foot-Dragging
A bill is currently before Congress addressing the lapsed tax breaks (which were extended in last year’s tax bill passed in late December). Those tax breaks are deductions for:
- State sales taxes paid
- College tuition, and
- Teachers’ classroom supplies
My comments about this – these are valuable tax deductions for the average taxpayers, with the exception of the state sales tax deduction. I would venture to guess that most of my clients eligible for these deductions received them either in full or in part (due to AGI limitations). I would like to see them stay in place. Does it really cause a problem for Congress to grant hardworking teachers a $250 tax deduction for supplies purchased for their classrooms?
My tax resource providers think that this bill will stall because the House wants the cost of these deductions to be offset by tax increases in other areas, while the Senate wants only partial offsets. There is doubt that this can be resolved by the time Congress adjourns on September 26 (they won’t return until after the Presidential election on November 4), and to make matters worse the tax forms for 2008 will have already gone to the printer by that time. If the deductions are allowed to stand, then the changes of course will be made retroactive to 2008 in its entirety.
Other potential changes include the AMT, the extension of the 15 year write off for restaurant renovations and for tenant improvements, energy credits for wind, solar and geothermal power, and the tax credit for R&D.
Let’s stay tuned….
