In the massive budget deal passed last week, Congress has bestowed surprise tax breaks on homeowners, students and the climate conscious. There are tax breaks for mortgage insurance premiums, higher-education expenses, energy-efficient home-improvement projects and more. These were tax breaks that expired at the end of 2016, but are now back on for 2017, now that Trump has signed them into law.
The immediate good news for taxpayers: You could see additional tax savings on the tax return you’re filing now—for the 2017 tax year. Below are some highlights. For a complete list, click here.Â
Tax Relief for Families and Individuals
Extension and modification of exclusion from gross income of discharge of qualified principal residence indebtedness. The provision extends through 2017 the exclusion from gross income of a discharge of qualified principal residence indebtedness. The provision also modifies the exclusion to apply to qualified principal residence indebtedness that is discharged pursuant to a binding written agreement entered into in 2017.
Extension of mortgage insurance premiums treated as qualified residence interest. The provision extends through 2017 the treatment of qualified mortgage insurance premiums as interest for purposes of the mortgage interest deduction. This deduction phases out ratably for taxpayers with adjusted gross income of $100,000 to $110,000.
Extension of above-the-line deduction for qualified tuition and related expenses. The provision extends through 2017 the above-the-line deduction for qualified tuition and related expenses for higher education. The deduction is capped at $4,000 for an individual whose adjusted gross income (AGI) does not exceed $65,000 ($130,000 for joint filers) or $2,000 for an individual whose AGI does not exceed $80,000 ($160,000 for joint filers).
Incentives for Energy Production and Conservation
The $500 energy-efficient home improvements tax credit. You can get a tax credit (that’s a dollar-for-dollar reduction in your tax liability) of up to $500 (10% of the amount paid) for making energy-efficient home improvements like new windows or upgraded heating/a-c equipment.
The 2-wheel plug-in electric vehicle credit. Did you buy an electric motor bike in 2017? The 10% tax credit is back, capped at $2,500.
The geothermal and small wind residential energy tax credit. Generous tax breaks for home solar got extended in the last go-round, but geothermal home energy systems and small wind were left out. Now that’s fixed. For geothermal systems and windmills placed in service from Jan. 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.
Leave A Comment