Last Minute Changes to 2017 Taxes

380news - March 2, 2018 - Business - Leave a comment

When Congress reached a budget deal on February 9, tucked away in the bill were surprise tax breaks for homeowners, students and energy savers. Those tax breaks are the extenders, or provisions that expired at the end of 2016 but have been extended through 2017. Yes, the tax breaks are retroactive to January 1, 2017, and affect the tax return that you will file or have already filed in 2018. If you’ve already filed your tax return and think you might be affected by the tax extenders provisions, here’s what you need to do: You can be angry at Congress, but don’t be mad at your tax professional. This was not on anyone’s radar screen. It’s done, it happened, we were all caught by surprise. The IRS wasn’t prepared to react immediately to the new law, issuing a statement that said, about the extenders: The IRS is reviewing the legislation signed Feb. 9 that retroactively extended and modified numerous tax provisions covering 2017. We are assessing these significant changes in the tax law and beginning to determine next steps.

The IRS will provide additional information as quickly as possible for affected taxpayers and the tax community. The extenders list might be long, but they will apply to a limited number of taxpayers. First, make sure that you’re affected (and that you haven’t been phased out by income or other restrictions) by the extenders before taking additional steps. Your tax professional should be able to help. The provisions that most likely impact you as an individual taxpayer include extensions for:

  • exclusion from gross income of discharge of qualified principal residence indebtedness
  • mortgage insurance premiums treated as qualified residence interest
  • above-the-line deduction for qualified tuition and related expenses
  • credit for nonbusiness energy property credit for residential energy property
  • credit for new qualified fuel cell motor vehicles
  • credit for alternative fuel vehicle refueling property
  • credit for 2-wheeled plugin electric vehicles

It’s easy enough to fix a mistake like a missed tax credit, you typically amend your previously filed tax return with a form 1040X. It is usually best handled by a tax professional and be prepared to pay for it. You must mail it in and it usually takes an additional 8 to 12 weeks for the IRS to process it and issue a refund. That said, I don’t know that I would rush right out to fix it. I would wait to see whether IRS offers an alternative solution in the near future. If you’re annoyed by the inconvenience of potentially redoing your tax return, don’t take it out on your tax pro or your tax software manufacturer: It’s not their fault that they don’t have crystal balls. Instead, let your representatives in Congress know that you’re unhappy with their last minute changes. Anita Jean is an Enrolled Agent, licensed to practice at all levels of the IRS. She can be reached at 940.365.3115 or 5099 US Hwy 377, Suite 400 in Krugerville.



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