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March 05, 2018 | Posted in:

Key Tax Breaks Revived in Time for 2017 Tax Returns

Taxpayers rejoice: In early February, Congress passed a federal budget bill that ended up reviving dozens of expired tax breaks for the 2017 tax year. These “extenders” that expired in 2016, were left out of the massive Tax Cuts and Jobs Act signed in December, but are now retroactive for 2017. Over 30 tax breaks impacting homeowners, business owners, students, and environment-friendly expenses are now back into play and may affect your 2017 return.

Popular Tax Breaks

Following are some of the most useful tax breaks that may apply to your situation. If you have not yet filed your 2017 tax return, please be aware these late changes are retroactive to the beginning of 2017.
 

Tuition and fees deduction.

If you paid qualified tuition and related higher education expenses, you may be able to deduct as much as $4,000 of those costs. This can be done on a regular return (without itemizing). The deduction is capped at $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less ($130,000 joint) and at $2,000 for single filers with AGI of $80,000 or less ($160,000 joint).

 

Mortgage insurance deduction.

If you paid mortgage insurance premiums, you can now once again deduct those amounts as an itemized deduction. This deduction begins to phase out for taxpayers with AGI of $100,000 or more.

 

Mortgage debt forgiveness exclusion.

If qualifying mortgage debt on your primary residence was discharged or forgiven, you can exclude that amount from your income.

 

Energy-efficient home improvement credit.

Energy-efficient home improvements (such as upgrades to windows, or heating and cooling systems), may be eligible for a tax credit equal to 10 percent of the amount paid, up to $500.

 
 

The Full List of Extended Tax Provisions

Congress will have to make a decision in 2018 whether these extenders are to be permanent or if they will come to an end in 2017. Per The Tax Foundation, following is the full list:

 

Provisions Extended Through
Extended Individual Provisions
Mortgage insurance premiums treated as qualified residence interest. 2017
Above-the-line deduction for qualified tuition and related expenses. 2017
Exclusion from gross income of discharge of qualified principal residence indebtedness. 2017
Extended Miscellaneous Provisions
Special expensing rules for certain film, television, and live theatrical productions. 2017
Empowerment zone tax incentives. 2017
Special rule relating to qualified timber gain. 2017
7-year recovery period for motorsports entertainment complexes. 2017
Railroad track maintenance credit. 2017
Mine rescue team training credit. 2017
Election to expense mine safety equipment. 2017
Classification of certain race horses as 3-year property. 2017
Extension of American Samoa economic development credit. 2017
Indian employment tax credit. 2017
Accelerated depreciation for business property on an Indian reservation. 2017
Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. 2017
Extended Renewable Energy Provisions
Credit for nonbusiness energy property. 2017
Credit for energy-efficient new homes. 2017
Energy efficient commercial buildings deduction. 2017
Extension and modification of credit for residential energy property. 2022, subject to rate reductions in later years
Credit for alternative fuel vehicle refueling property. 2017
Credits for new qualified fuel cell motor vehicles and/or 2-wheeled plug-in electric vehicles. 2017
Excise tax credits relating to alternative fuels. 2017
Second generation biofuel producer credit. 2017
Special allowance for second generation biofuel plant property. 2017
Biodiesel and renewable diesel incentives. 2017
Credits with respect to facilities producing energy from certain renewable resources. 2017
Production credit for Indian coal facilities. 2017
Extension and phaseout of energy credit. Phases out through 2022. Makes expiration date and phaseout schedule consistent across properties with different sources of energy.
Extension of special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities. 2017
Extension of Oil Spill Liability Trust Fund financing rate. Reinstated on the first day of the first calendar month following enactment of the bill.
Modifications of credit for production from advanced nuclear power facilities. Allows Treasury Secretary to reallocate unused capacity after January 1, 2021.

 
 

If you think any of these apply to you, bring all the related documentation to your tax filing appointment. If you have already filed, you may need to file an amended tax return to capture these very late law changes, but your accountant and advisor can walk you through the most appropriate course of actions.

 

The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information or for assistance with any of your tax or business concerns, contact our office at 856.667.4100.

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