Many Massachusetts companies and individuals are once again in the dark as to whether they will receive certain tax credits during 2014. One of the side effects of a Congress that is deeply divided on budgeting issues is that 55 tax credits expired at the end of 2013. While it is expected that most will be renewed, there is no guarantee this will be the case.
Even if a tax credit does end up being put back in place, the requirements for being eligible for it may change. Claiming credits that someone is no longer eligible for can lead to tax audits for businesses and individuals, even if they were not aware of the change. It is up to the individual and business owners to stay on top of these matters.
The problem is especially difficult for businesses that will have problems planning for 2014. Lawmakers may not look into renewing tax credits for months, meaning that a number of businesses will be held in limbo wondering if they will end up receiving a tax break or being on the hook for the difference. As an example, questions as to whether a credit for research and development expenses will like result in less money being spent on innovations until the matter is resolved.
If someone is having trouble staying compliant with tax code due to the complexities of it, they may end up facing an audit or owing the IRS money. A tax attorney may be able to help someone negotiate with the IRS and settle the matter for less than they owe, and the attorney could help someone ensure their taxes are handled appropriately, reducing the risk of an audit.
Source: USA Today, “Congress letting 55 tax breaks expire at end of year“, December 31, 2013