Ways and Means to vote on extending deduction for IRA charitable contributions

One of several tax extenders the committee will take up Thursday

By Mark Schoeff Jr.

May 27, 2014 @ 2:32 pm (Updated 4:23 pm) EST

(Bloomberg News)

The tax-writing committee in the House of Representatives is scheduled to vote later this week on legislation that would make permanent a tax deduction for charitable contributions from individual retirement accounts.

The measure will be one of several so-called tax extenders that the House Ways and Means Committee will take up on Thursday.

Under the bill, written by Rep. Aaron Schock, R-Ill., taxpayers age 70˝ and older could make charitable contributions of up to $100,000 from their IRAs and Roth IRAs without having to treat the money as taxable income.

The provision was extended for 2012 and 2013 in the fiscal cliff bill that Congress passed in January 2013. As of the end of last year, it had expired for 2014.

Ways and Means Committee Chairman Dave Camp, R-Mich., is rolling out several tax extenders as stand-alone bills for votes by the panel and on the House floor. Recently, a bill that would permanently extend a research and development tax credit was approved by the House.

Congressional aides and analysts are expecting that the IRA bill also will sail through the committee and be approved on the House floor.

“We anticipate broad bipartisan support for this in committee,” said Benjamin Cole, senior adviser to Mr. Schock.

The pending vote in the Ways and Means Committee is good news for the IRA bill, according to Dean Zerbe, national managing director of alliantgroup, a tax consulting firm for small businesses.

“You can go to bed feeling pretty good that it will be extended in one form or another,” said Mr. Zerbe, former Republican tax counsel on the Senate Finance Committee.

The Senate took up a bill two weeks ago that would continue for two years about 50 tax extenders. It bogged down over fighting centered on how many amendments Republicans could offer on the bill.

The chamber is likely to come to an agreement on procedure and give it a strong bipartisan vote, according to Mr. Zerbe.

“There is a desire on both sides to move the bill forward,” he said.

Obstacles still loom. The Obama administration is reluctant to permanently extend the tax breaks — as the piecemeal House bill would do — without having them paid for by cuts elsewhere in the budget. The Senate bill is not paid for either.

In addition, the House is dealing with tax extenders one by one and making them permanent, while the $85 billion Senate package would extend them all only for two years. They affect small businesses, families and individuals.

“The Senate is doing a tango, and the House is putting on waltz music,” Mr. Zerbe said.

But both sides of Capitol Hill are addressing extenders sooner than usual. In past years, they have languished until the end of the year or into the next year.

  @IN Wire

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