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