As you get ready for the upcoming tax season, take note of some tax deduction items that are making a comeback due to approved tax extenders that expired in 2017 or 2018. On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020 (HR1865), which extended some of the tax provisions that were not addressed under the Bipartisan Budget Act of 2018 or the Tax Cuts and Jobs Act of 2017. Check out the full text of the bill here and start at Division Q – Revenue Provisions at page 1713 of the bill.
The new Act reinstates many of the previously expired tax incentives for a three-year duration, making them retroactively effective for 2018 and 2019 and prospectively extending them until the end of 2020.
Among the most commonly used tax extenders that made a comeback are:
- reducing the adjusted gross income floor for medical and dental expense deduction from 10 percent to 7.5 percent
- reinstating the above-the-line deduction for qualified tuition and related expenses
- reinstating the deduction for mortgage insurance premiums (PMI) as deductible qualified resident interest
- excluding qualified principal residence indebtedness (canceled debt) from gross income
If you think one of these extenders may benefit your 2018 tax return, contact me to discuss filing an amended return.
