It’s A Wonderful Time Of Year!

December 16, 2013 § Leave a comment

It’s that time of year again!  A joyous time of year (the holidays, family, friends, giving, receiving and remembering)…oh, no, sorry, it’s expiring tax provisions time!  It’s that annual December 31st deadline when Congress checks its list (checks it twice, I’m told) for tax stuff that goes away or comes back unless they do something.

In 2007, the House and Senate enacted a “Pay-As-You-Go” (or “PAYGO”) budget rule that requires all entitlement increases and tax cuts be offset fully by increased revenue or spending cuts.  Since Congress has difficulty coming to a long-term budget agreement, it instead passes short-term resolutions to keep the federal government funded.  This somewhat dysfunctional process means that several taxpayer-friendly breaks must be reconsidered each year as part of a continuing budget re

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Here are some of the more mainstream tax breaks set to expire on December 31st unless Congress takes action:solution package.

  • The $4,000 above-the-line tuition and fees deduction for higher education expenses;
  • The election to deduct state and local general sales tax in lieu of state and local income tax;
  • $250 above-the-line educator’s expense for K-12 teachers;
  • Treatment of mortgage insurance premiums as qualified home mortgage interest;
  • The $500 personal energy property credit available to homeowners;
  • Qualified charitable distributions (gifts to charities from IRAs owned by taxpayers over age 70 ½);
  • For most businesses, bonus depreciation provisions will expire;
  • The research credit expires, which is a business credit for the cost of increasing research activities; and
  • The $500,000 Section 179 deduction for businesses will drop back to $25,000.

On December 10th, perhaps sensing voter anger with this continuing impasse, Rep. Paul Ryan and Sen. Patty Murray unveiled a two-year budget agreement that hopefully will curtail the cycle of continuing budget battles on Capitol Hill.  The budget agreement, still subject to change and approval by Congress, will offset some of the sequester effects, but does not raise the debt ceiling.

Looking a little deeper into the agreement?  Nowhere does it provide for extension of the more than 60 tax provisions set to expire on December 31st.

So, will Congress act to renew these breaks?  They usually do, eventually, but there are no guarantees all of these items will be extended.  What’s becoming clear is that the extender legislation won’t be happening anytime soon, since Congress is packing to go home for vacation.

Follow our Twitter feed.  We’ll let you know what happens, or doesn’t happen.

Tom Pflanz, CPA, CFP®
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Partner – McGowen, Hurst, Clark & Smith, P.C.
tpflanz@mhcscpa.com
www.mhcscpa.com

A Day to Remember

December 3, 2013 § Leave a comment

November 22, 1963. A day that changed the course of history and the lives of many people. I have spent the last few weeks watching several television shows and reading many articles about the assassination of John Fitzgerald Kennedy, the 35th President of the United States.

I was eleven years old in November, 1963, a sixth grader living in Winterset, Iowa. The community had outgrown the school facilities located in town, so sixth graders were bused to a small building called Scott School, located about five miles from town. The extra time spent on the bus was not that much fun, but the travel reduced the available time that could be spent in the classroom. Not a bad trade off, we thought.

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I don’t remember anything unusual about the morning of that day. I’m sure it was a regular school day. I do remember being in math class right after lunch when the announcement came that we should return to our homeroom. That was unusual, but we still had no inkling about what had happened. Once back in our homeroom, it was obvious something was wrong. Miss Null was visibly upset as she told us we were all going to the gym/lunchroom for an announcement. When settled there, the principal told us the President had been shot in Dallas, Texas, and they, the teachers, thought we should be part of an historic day. About one hundred students watched a small black and white television sitting on a table in the from of the room – struggling to hear what Walter Cronkite was saying. I remember thinking, “He’ll be OK – he can’t die.” But he did. There was a sense of disbelief when Cronkite announced his death at about 1:00 PM. I’ve seen that clip many times over the last few weeks, and I always flash back to that small gymnasium at Scott School.

The assassination shook our country to its core. I remember our teacher crying and school being dismissed early. Everyone, my parents included, were upset and not sure how to react. This was not supposed to happen. Adults always had all the answers, but now it seemed even they didn’t know exactly what to do. That scared me.

As the next several days unfolded, the murder of Oswald, the funeral procession, and the constant news coverage, the country seemed frozen in time. Community events were cancelled as a nation struggled to recover. We regrouped and slowly returned to a more normal routine.

Today, fifty years later, people my age and older are still infatuated by the events of that day. How could one man, Lee Harvey Oswald, just twenty-four years old, so significantly change the course of history? Was there a conspiracy? Was there a shot from the grassy knoll? What would our country be like if Kennedy had lived?

Many, maybe all, of those questions will never be completely answered. We are left to speculate and remember. We can all agree that day changed the future significantly and will not be forgotten.
November 22, 1963.

Jim Smith
Jim Smith

 

 

 

Partner – McGowen, Hurst, Clark & Smith, P.C.
jsmith@mhcscpa.com
www.mhcscpa.com

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