Merry Taxmas! House OKs tax bill

The House late last night finally signed off on the tax bill that will keep the tax cuts that were scheduled to expire at the end of 2010 in place for two more years.

The tax cuts account for most of the bill's $858 billion (spread over 10 years) price tag. Those tax breaks amount to $700 over the next decade.

Here's what we're paying for: In addition to keeping the current six tax rates that range from 10 percent to 35 percent, the bill contains a raft other tax breaks for both individuals and businesses.

Many of the provisions relate to 2011, but there are some of the individual tax provisions that expired at the end of 2009 and were extended retroactively for the 2010 tax year:

• Alternative minimum tax (AMT) patch
• State and local sales tax deduction (itemizing required)
  
• Tuition and fees deduction
• Teachers et al write-off for $250 of out-of-pocket expenses
• Private mortgage insurance (PMI) deduction
• Direct donation of IRA money by older account holders

I blogged about the PMI tax break yesterday. I'll be writing about the other provisions that could affect, and by affect I mean help reduce, your 2010 taxes in the next few days.

A torturous process: It wasn't fun or pretty getting here.

Taxpayers and tax professionals who've been in limbo with regard to 2010 tax provisions have waited almost a full year for finality on some tax moves they wanted to make. At least this year, unlike previous ones when tax measures were dealt with after Christmas, we have a couple of weeks instead of just a couple of days to make some plans.

On Capitol Hill, the continued low tax rates for wealthy individuals and the less taxing estate tax provisions caused much consternation among some Democrats. They felt the president had abandoned his party when he worked out the deal with Republicans.

Tensions and resistance was so high earlier in the day that the vote was pushed back into the evening.

But when that tally finally was taken, the margin of victory in House — 277 to 148 — was surprisingly large.

The key was that if not passed in the version approved earlier by the Senate, the process would have to start all over. Nobody wanted that, least of all member of Congress who returned to Washington for the lame duck session.

Most taxpayers had made their personal peace with the Obama/GOP deal. And folks who now will get 13 more months of unemployment benefits thanks to the measure's passage definitely were for it.

So in the end, after all the shouting and possibly some crying by House Speaker-in-waiting Rep. John Boehner (R-Ohio), the bill passed.

It's now on its way to Obama to be signed into law.

Merry Taxmas and God help us everyone!

Related posts:

• Democrats hold up tax bill consideration
• Tax cuts bill sails through Senate, House vote likely Thursday
• Estate tax: House Democrats line in the sand?
• Dems agree to disagree over tax deal
• Tax cuts extension deal passes first Senate test
• Senate to vote on tax cuts deal today
• Obama, GOP strike deal to extend tax cuts
• Reaction to proposed tax deal mixed (vote in the poll!)

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