As part of last year’s spending bill, Congress revived some valuable tax breaks that had been eliminated by the Tax Cuts and Jobs Act or were set to expire in 2019. The law even extends these credits and deductions retroactively, so many taxpayers may collect a refund by filing amended returns. Below are a few extenders you should know about before beginning this year’s tax preparation.

The 2019 Tax Extenders

Mortgage Insurance Premium Deduction

Lenders typically require borrowers who make down payments of less than 20% to purchase mortgage insurance (PMI), which was deductible until 2017. The Consolidated Appropriations Act restored this deduction retroactively, so if you paid PMI premiums in 2018, you may be eligible for an additional refund for 2018 if you itemize your deductions. You should also provide the amount of 2019 premiums to your tax preparer to determine if you have enough expenses to itemize your deductions when filing for this year as well.

Qualified Tuition & Related Expenses Deduction

The tax bill also restored the deduction for qualified tuition and related expenses for some taxpayers. Taxpayers with adjusted gross incomes (AGI) of less than $65,000 per year ($130,000 for married couples filing jointly) may write off up to $4,000 in qualified expenses, while those earning between $65,000 and $80,000 ($130,000 and $160,000 for married couples) may deduct up to $2,000.

Reduction in the Floor for Medical Expense Deductions

Until 2018, taxpayers could deduct qualified medical expenses that exceed 7.5% of their AGI, but that was scheduled to increase to 10% in 2019. The new legislation delays this increase through the end of 2020, leaving the medical expense floor at 7.5%.

Nonbusiness Energy Property Credit

The nonbusiness energy property credit allowed homeowners a tax credit up to 10% of qualified improvements that increased the efficiency of their homes. This popular credit expired in 2017, but it has been restored by the new law and extended retroactively to include 2018 through 2020. If you made investments that improved the efficiency of your home during 2018, your tax preparation professional may recommend filing an amended return.  Furthermore, if you made qualified improvements to your home in 2019, remember to provide documentation of those costs to your tax preparer as you may be eligible for a tax credit when filing your taxes this year.

With decades of experience and a constantly updated knowledge of the code, Donna J. Troutman CPA PC offers detailed advice and superior tax preparation services to individuals and businesses throughout Lewisburg, PA. Whether you’re filing an amended return or dealing with complex tax issues, their accountants will ensure you get every deduction and credit to which you’re entitled. Visit their website for more on the new spending bill or call (570) 523-7337 to schedule your tax preparation appointment today.