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House OKs extending tax breaks

December 9, 2009

That was easier than I thought it might be.

The House actually began and completed consideration today of H.R. 4213, the bill to extend 49 tax provisions set to expire at the end of the year.

Representatives approved the measure by a vote of 241 to 181.

Winners: These extenders, as I noted in my post Tax break extenders on tap earlier today, include several that are popular with us rank-and-file taxpayers:

  • Deduction of state and local general sales taxes,
  • Additional standard deduction for real property taxes,
  • Deduction for qualified tuition and related expenses,
  • Deduction by educators for certain classroom expenses, and
  • Direct tax-free transfer of IRA distributions to a charity.

Losers: Not as pleased, however, are money managers.

One of the ways to pay for the extended tax breaks is an increase on taxes charged on investment carried interest, also discussed in my earlier post.

Private equity and venture firms that would be hit hardest by the hike of the tax rate from 15 percent to 35 percent are now looking to the Senate for help. In prior years, that body has deleted similar provisions from extender bills.

This year, however, there's the worry that the crush of year-end legislation might make it too tempting to simply move the bill along.

"At three in the morning when you've been working on health care for
months and you just want to go home, you might just throw your hands up
and say, 'We'll take care of this later'," said Mark Heesen, president
of the National Venture Capital Association.

Stay tuned.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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