WASHINGTON (Reuters) - The U.S. Senate was expected this week to renew dozens of temporary tax breaks, known as the "extenders," including big ones for business research, wind power and foreign profits.
Ordinary Americans are also affected by extender provisions for state and local sales tax, canceled mortgage debt, college tuition, schoolteacher supplies and health insurance.
Senate aides said on Sunday that Senate Democratic Leader Harry Reid planned to handle some nominations first, then take up the tax bill sent over from the House of Representatives.
The House voted on Dec. 3 to renew retroactively back to Jan. 1, 2014 a 55-item package of extenders tax breaks. Most of them expired at the end of 2013 and have since been in limbo.
The renewal measure approved by the House would only be good through the end of this year. If the Senate concurs, that would mean taxpayers could claim the tax breaks for the 2014 tax year, but Congress would have to debate them all over again in 2015.
"We are confident that within the next 72 hours the Senate will send a bill to the president that provides the full tranche of 55 tax credits," said Height Securities analyst Henrietta Treyz in a research note on Monday.
The Senate was unlikely to change the bill. That would mean returning it to the House, which has adjourned for the holidays.
The Senate approved a $1.1 trillion spending bill late on Saturday, preventing a federal government shutdown. President Barack Obama was expected to sign the spending bill within days.
The House's extenders bill was projected to cost U.S. taxpayers $41.6 billion over 10 years. The House dedicated no new federal revenue sources to fully offsetting that cost, which means it would increase the federal budget deficit.
The extenders usually win short-term renewal and extension from Congress every year or two.
Nearly half of the total 10-year estimated cost of the extenders comes from the three largest: a $7.6 billion credit for business research and development costs; a $6.4 billion tax break for renewable energy production plants; and a $5.1 billion tax exception that allows financial firms and other businesses to defer U.S. taxes on certain foreign profits.
Another tax break, known as bonus depreciation, allows businesses to write off and deduct capital investments more quickly. Estimated to cost $1.5 billion, the tax break could cost much more if renewed again and again, critics have said.
Senate aides said on Sunday that Senate Democratic Leader Harry Reid planned to handle some nominations first, then take up the tax bill sent over from the House of Representatives.
The House voted on Dec. 3 to renew retroactively back to Jan. 1, 2014 a 55-item package of extenders tax breaks. Most of them expired at the end of 2013 and have since been in limbo.
The renewal measure approved by the House would only be good through the end of this year. If the Senate concurs, that would mean taxpayers could claim the tax breaks for the 2014 tax year, but Congress would have to debate them all over again in 2015.
"We are confident that within the next 72 hours the Senate will send a bill to the president that provides the full tranche of 55 tax credits," said Height Securities analyst Henrietta Treyz in a research note on Monday.
The Senate was unlikely to change the bill. That would mean returning it to the House, which has adjourned for the holidays.
The Senate approved a $1.1 trillion spending bill late on Saturday, preventing a federal government shutdown. President Barack Obama was expected to sign the spending bill within days.
The House's extenders bill was projected to cost U.S. taxpayers $41.6 billion over 10 years. The House dedicated no new federal revenue sources to fully offsetting that cost, which means it would increase the federal budget deficit.
The extenders usually win short-term renewal and extension from Congress every year or two.
Nearly half of the total 10-year estimated cost of the extenders comes from the three largest: a $7.6 billion credit for business research and development costs; a $6.4 billion tax break for renewable energy production plants; and a $5.1 billion tax exception that allows financial firms and other businesses to defer U.S. taxes on certain foreign profits.
Another tax break, known as bonus depreciation, allows businesses to write off and deduct capital investments more quickly. Estimated to cost $1.5 billion, the tax break could cost much more if renewed again and again, critics have said.
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