Every year tax professionals around the country hold their proverbial breath waiting for Congress to take action on the tax code. And almost as sure as the sun coming up, Congress avoids permanent tax policy discussions by agreeing on and passing a series of tax extenders. Tax extenders are the common term for what are a set of temporary corporate and individual tax breaks. The extenders are usually passed with the goal of assisting taxpayers and stimulating the economy.
The dilemma posed by tax extenders often centers on tax planning. With most extenders lasting one or two year, consistent and proactive tax planning advice can be difficult to give. For example, quite a few of the current extenders up for debate expired in 2013 but were reinstated for 2014 in December of 2014 (Russell, Accounting Today). The idea that that if a tax law goes into effect two weeks before the end of the year should be inconceivable. And yet, Congress puts American through it almost every year.
As is stands, tax professionals have no choice but to offer planning advice on what Congress will “probably” do based on past years of doing the same. Is that good planning or educated guessing?
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