Tax Tip Tuesday: Tax Provisions from New Budget Law
This week we will take a look at some tax provisions that were included in the budget deal that was recently signed into law.
The following are provisions for individuals that expired at the end of 2016. However, they were retroactively reinstated, but only through 2017.
Deduction for mortgage insurance premiums — this basically allows mortgage insurance premiums to be treated as deductible interest.
Ability to exclude a discharge of residential mortgage indebtedness from gross income — which also modifies the exclusion to apply to qualified principal residence indebtedness that’s discharged pursuant to a binding written agreement entered into in 2017.
Above-the-line deduction of up to $4,000 for higher-education expenses — which includes tuition and related expenses.
$500 energy-efficient home improvements tax credit — is listed under “energy” extenders, but it affects a homeowner’s personal tax return. You can get a tax credit of up to $500 (10% of the amount paid) for making energy-efficient home improvements like new windows or upgraded heating/a-c equipment.
Geothermal and small wind residential energy tax credit — for geothermal systems and windmills placed in service from January 1, 2017 through 2019. The credit is 30% of the cost of the system, and then it drops to 26% for 2020 and 22% for 2021. It sunsets on December 31, 2021.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein