As I write this on Monday morning, which party will control the United States House of Representatives is still in doubt almost a week following Election Day. No matter how one feels about this, it is difficult for either party to claim that their favored forward path has overwhelming support. This, though, may just raise more questions about what will happen during the lame duck session of Congress before the new members are sworn in next year.
As a bit of a caveat, saying this does not mean that anything is destined to happen. It is just as likely that very little happens over the final weeks of the year and things stand as they do now. However, it is also easy to pick out possible tax laws that each side (or even both!) would like to see passed. It is not my role here to cast any predictions on what may happen.
It is my role, however, to point out that things may happen. And if things happen now that affect the tax return you will be putting together in just a couple months, well, that was pretty impossible to plan for. Clearly there is value in tax planning so that you are not completely surprised when you do file that return, but it is simply not possible to plan for everything all of the time down to the penny.
And this does highlight something that we often mention in this space – you can only operate under the rules that are in place. These recent close elections help display just how divided each side is on either side of pretty much every issue. It then is obvious that not everyone is going to be happy with where tax law stands at any time. Heck, I would even say that it may be difficult/impossible to find anyone who thinks everything in this area is exactly as it should be. But there will be this continual push and pull and compromise as each side tries to get some pieces it wants and allows some concessions to get them.
How close things are also show how difficult it is to predict who will hold power, never mind what they can do once they get there. No matter what the final results are here, they are closer than almost everyone guessed they would be. So if you were putting a lot of hopes into things turning out one way and planned accordingly thinking it would be a trigger … well, that didn’t work out.
Even when things aren’t clear, though, we can continue to plan, and we will continue to plan according to the rules in places – no matter what they are.
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