House approves one-year extension of $45 billion in tax breaks
The House on Wednesday voted 378-46 to approve a one-year extension of $45 billion in tax breaks, mostly for businesses, after bipartisan efforts on a longer-term extension fell apart as an end-of-the-year deadline approaches.
The Senate is expected to follow suit in the coming days so companies and individuals could deduct dozens of types of costs from this year’s taxes.
“With the end of the year and a new tax filing season rapidly approaching, we need to act,” said House Ways and Means Committee Chairman Dave Camp (R-Mich.), who preferred a longer extension of the temporary breaks, including making some permanent.
The breaks expired on Dec. 31, 2013, but the practical effects would not be felt until tax returns are filed next year.
The legislation extends the breaks retroactively and just through the end of this calendar year so they can be claimed by tax filers.
Among the extended breaks is a key provision for homeowners, first enacted in 2008, that exempts from taxes as much as $2 million in forgiven mortgage debt for people who received aid from banks to avoid foreclosure.
The expired business provisions include the widely used research and development tax credit and another break for so-called bonus depreciation that allows businesses to increase the amount of the cost of capital purchases they can write off the year they are made.
But some business tax breaks are narrowly targeted, including one that benefits Hollywood. The provision allows qualifying movie and TV productions to write down the first $15 million of expenses.
Despite the bipartisan vote, Republicans and Democrats lamented that they once again were providing a short-term extension of breaks that routinely expire.
Congress will take another shot at a longer-term extension next year with Republicans holding a stronger hand after winning control of the Senate and adding to their House majority in the mid-term elections.
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