Monday, November 23, 2009

House Prepares To Renew Expiring Tax Cuts For One Year

After voting to extend the homebuyers credit just a few weeks ago, Congress is already making plans to extend $37 billion in tax cuts for individuals and businesses in 2010. Leaders of the House of Representatives have been working on legislation and assert that they plan to pass the legislation by the end of the year as part of an effort to create jobs.

According to a summary obtained by Dow Jones Newswires, the package will be offset by tax-raising provisions, but those provisions are not identified in the summary.

The draft bill omits a provision to temporarily shield middle-class taxpayers from the alternative minimum tax in 2010. Congress earlier this year passed an AMT "patch" for 2009.

Since the lack of an AMT patch for 2010 won't affect most taxpayers until they file tax returns in 2011, House lawmakers said they will likely wait until next year to pass it.

High-tech firms and manufacturers would gain a one-year extension of the research tax credit, while banks would get an extension of a tax break on their overseas business income.

NASCAR racetracks would win another year of more favorable depreciation rules under the House bill, as would retail stores and restaurants.

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