As 2013 comes to a close and we ready ourselves to welcome in 2014, Congress is poised to let 55 popular tax breaks expire at midnight. However, taxpayers won't notice this until next year when they file their taxes for 2014. Then they'll be getting the bill in 2015.
The Associated Press, via Fox News, reports:
Lawmakers let these tax breaks lapse almost every year, even though they save businesses and individuals billions of dollars. And almost every year, Congress eventually renews them, retroactively, so taxpayers can claim them by the time they file their tax returns.
No harm, no foul, right? After all, taxpayers filing returns in the spring won't be hurt because the tax breaks were in effect for 2013. Taxpayers won't be hit until 2015, when they file tax returns for next year.
Not so far. Trade groups and tax experts complain that Congress is making it impossible for businesses and individuals to plan for the future. What if lawmakers don't renew the tax break you depend on? Or what if they change it and you're no longer eligible?
"It's a totally ridiculous way to run our tax system," said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation. "It's impossible to plan when every year this happens, but yet business has gotten used to that."
Congress is on vacation until January, so they are not going to interrupt their New Year festivities in order to come back to Washington to look out for their people, are they? Remember that little budget deal that Paul Ryan and Patty Murray put forth that is being praised by everyone? Apparently, it didn't come with anything in it for the American taxpayer, except more debt and more spending. It didn't cut taxes, but it sure was a slap in the face and a kick in the teeth to our veterans. I guess they think they can continue to kick the can down the road until next year and then fix it.... or not.
"More cynically, some people say, if you just put it in for a year or two, then that keeps the lobbyists having to come back and wine-and-dine the congressmen to get it extended again, and maybe make some campaign contributions," said Mark Luscombe, principal tax analyst for CCH, a consulting firm based in Riverwoods, IL.
With these tax breaks expiring, one can easily say that some people's taxes are going to be going up. What is amazing is that some people will be happy about that, including self-professed conservatives. Why is that? It's because many are upset, and rightly so, that they are paying increased percentages in taxes than their fellow Americans.
CBS reports, "This year, the package of tax breaks has been caught up in a debate about overhauling the entire tax code. The two top tax writers in Congress - House Ways and Means Committee Chairman Dave Camp, R-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont. - have been pushing to simplify the tax code by reducing tax breaks and using the additional revenue to lower overall tax rates."
Simplification, in Washington terms, means more manipulation and increased taxes. Simplifying the tax code is not an "overhaul of the entire tax code."
I'm all for a complete overhaul of the tax system. I'm with Ted Cruz, who called for the abolishment of the Internal Revenue Service and then use IRS agents to secure the border. I'm for people taking every step to keep more of their own money, and I believe the tax code is nothing more than a manipulation of the population by the federal government.
May I suggest that we not be calling for increasing taxes on others, but lower taxes on everyone, including those that make more. May I suggest that we strip the IRS to the bone? By that, I mean eliminate it. In fact, why can we not have a flat tax on each household which is paid to the state and the states fund the federal government at what the people determine, not what Washington does? Currently, our money gets sent directly to the feds from our paychecks. Why not have a check and balance from the states so that money cannot be held over our heads?
At least with the current system, I suggest you use all available means to keep more of your money. With that in mind, CBS mentions 8 tax breaks you need to take advantage of this tax season:
- Section 179 expense deduction
- Deduction for state and local sales taxes
- Tax-free IRA distributions to charity
- Educators expense deduction
- Energy-efficient home improvement tax credits
- The Energy-efficient Home Credit
- Education tax deduction
- Exclusion from income for discharge of debt on principal residence
Interestingly enough, Jackie Perlman, principle tax research analyst at The Tax Institute at H&R Block, tells taxpayers to do something that Washington can't seem to do: "The best thing I would say is, budget accordingly. As the saying goes, 'hope for the best but plan for the worst.' Then if you get it, great, that's a nice perk. But don't count on it."
Why are none of these things touted by Washington?Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.