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House votes to make business tax break permanent

By WTOP Staff

STEPHEN OHLEMACHER
Associated Press

WASHINGTON (AP) — The House voted Thursday to make permanent a generous tax break that makes it easier for small businesses to buy new equipment and improve their property, part of an election-year showdown over a series of expired tax breaks worth billions.

The tax break allows business owners to more quickly write off the costs of computers, machinery and other equipment, as well as improvements to retail property. It expired at the beginning of the year, along with more than 50 other temporary tax breaks that Congress routinely extends.

The vote was 272 to 144 in favor of the bill. House Republicans said the bill is part of a broader effort to add more certainty to the tax code.

“My bill provides predictability by making permanent a small business expensing measure that’s been part of the tax code in some form since the 1950s,” said Rep. Pat Tiberi, R-Ohio, the main sponsor of the bill.

The bill allows businesses to immediately write off capital expenses of up to $500,000, rather than taking the deductions over several years.

Democratic leaders opposed the bill — and the White House threatened a veto — because it would add $73 billion to the budget deficit over the next decade. However, 53 rank-and-file House Democrats voted in favor.

“Whatever happened to all the rhetoric about getting our fiscal house in order? Out the window,” said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee.

The House also voted Thursday to make permanent two smaller tax breaks, including one that makes it easier for small business owners to deduct charitable contributions.

The Senate has been working on a package that would extend nearly all the temporary tax breaks through 2015, including dozens for businesses and individuals. The biggest tax break for individuals allows people who live in states without an income tax to deduct state and local sales taxes on their federal returns.

The fate of Thursday’s bills — and all the expired tax breaks — is unlikely to be resolved until after congressional elections in November.

If Congress renews the temporary tax breaks by the end of the year, taxpayers would be able to claim them on their 2014 returns, which will be filed next spring.

Business groups have complained for years about Congress allowing important tax breaks to expire every year or so, only to renew them just in time for taxpayers to claim them.

A coalition of 150 business groups representing numerous sectors lobbied Congress to pass Thursday’s bill.

“The roller-coaster, ad-hoc changes in the level of small business expensing, which have often been enacted retroactively in recent years, has greatly contributed to uncertainty and prevented long-term planning,” the coalition said in a letter to lawmakers.

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Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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