28 Jan 2020 Tax Extenders Bring Back Popular Deductions
On Dec. 20, 2019, the House and Senate passed the Consolidated Appropriations Act, 2020. This year-end spending package included many tax provisions. The bill also extends expired tax provision which may necessitate Amending your 2018 tax return. These tax changes are known as Extenders. Extenders are little tax breaks that often get extended year after year. Here is a brief overview of the most significant Extenders under the new Act.
2020 Extender Provisions by Category:
Individual and Family: The more well-known Extenders affect individuals. These include medical and dental expense deductions, the treatment of mortgage insurance premiums as deductible qualified residence interest, deductions for tuition and fees, Kiddie Tax, and the exclusion of forgiven qualified principal residence indebtedness from gross income. Learn more.
Employment, Economic Growth and Community Development: The extended provisions include several business incentives and incentives for investments in empowerment zones. It also includes the work opportunity credit and employer credit for paid family and medical leave. Learn more.
Energy Production, Efficiency, Green Economy Jobs: The majority of these Extenders relate to expired energy credits. The Act extends credits for energy-efficient homes and energy-efficient commercial buildings through 2020. Learn more.
Other Provisions: The Act also contains Extenders impacting taxes imposed by the Affordable Care Act and fixes to the Tax Cuts and Jobs Act. Learn more.
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There are many events that occur during the year that can affect your tax situation. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you experience any of the following:
- Pension or IRA distributions.
- Sale or purchase of a residence or other real estate.
- Significant change in income or deductions.
- Retirement.
- Job change.
- Notice from IRS or other revenue department.
- Marriage.
- Divorce or separation.
- Attainment of age 59 ½ or 70 ½.
- Self-employment.
- Sale or purchase of a business.
- Charitable contributions of property in excess of $5,000
This page contains general information for taxpayers and should not be relied upon as the only source of authority. Taxpayers should seek professional tax advice for more information.