More than 50 tax credits will expire on New Year’s Eve, depriving businesses and individuals the relief they once enjoyed for common expenditures such as buying racehorses and building NASCAR tracks.
The expiration of these provisions could threaten certainty in financial markets, according to business analysts at Mondaq.
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"If the past is prologue, some—but not all—of these provisions will be extended, but we will not know until much later in 2014 which ones will be extended, whether they will be extended with modifications, how long they will be extended, whether the extension will be retroactive and who will be stuck "paying" for any such extension," they wrote. "Still, despite the history of on-again, off-again extensions, it is risky to assume that any particular provision will be extended simply because it has been extended in the past."
Many of the IRS carve outs were developed during the 2008 TARP bailout and accompanying energy bills and have been renewed and extended over the years.
The federal government is expected to miss out on more than $75 billion if it extends all of these tax credits, according to the Congressional Research Service.
The expiring tax breaks include widely used credits, such as the deductions of state and local sales taxes and corporate research and developments deductions, but not every break seems essential. Here are the 10 silliest credits we’ll miss out on in 2014.
10. Credit for energy efficient appliances, which will save the government $700 million over the next 10 years.
9. American Samoa economic development credit, which would net the government $100 million.
8. Temporary increase in limit on cover-over of rum excise tax revenues to Puerto Rico and the Virgin Islands, which is worth $200 million to Bacardi.
7. Seven-year recovery period for motorsports entertainment complexes.
6. Above-the-line deduction for certain expenses of elementary and secondary school teachers, which is expected to stir outrage from the Obama administration’s teachers union allies.
5. Credit for health insurance costs of eligible individuals, which is outdated now that Obamacare has destroyed the individual market.
4. Special expensing rules for film and television production, which saved impoverished Hollywood studios $200 million.
3. Special rules for contributions of capital gain real property for conservation purposes, which enabled wealthy, guilt-ridden investors to use the revenue they get from Exxon to pay Greenpeace and its allies $300 million.