Big tax cuts aren't coming in 2005; neither the money nor the political willpower is there. But look for Congress, at the very least, to extend several tax breaks that are scheduled to go off the books at the end of the year, specifically:
AMT exemptions. The exemption limits that protect taxpayers from having to pay the alternative minimum tax (AMT) increased in recent years. But those amounts are scheduled to revert next year to the superlow exemption levels of 2000. Look for Congress to extend the 2005 limits for a year or two, but don't expect broad-based relief that's truly needed.
Research credit. The tax credit for your research costs is set to expire after 2005. The movement to make the credit permanent will likely fail, but you can count on another one- or two-year extension.
Sales tax deduction. The new optional deduction for state sales taxes (in lieu of a state income tax deduction) has become a big hit in low- and no-income tax states. Look for Congress to extend it beyond 2005.
Work opportunity tax credit. Congress seems content to extend annually the jobs credit for hiring "disadvantaged" workers (see 5/30/05 issue). This latest incarnation, which expires for qualified staff hired after 2005, should be no exception.
Tip: For a listing of expiring tax provisions, go to www.house.gov/jct/x-12-05.pdf.