On February 9th, Congress passed and President Trump signed into law the Bipartisan Budget Act of 2018. There are several tax extenders and other tax-related changes in the Act.
Below is a brief summary of what Somerset believes are the most relevant changes and/or extenders applicable to our clients.
Non-Extender Changes
- More favorable rules available to participants of qualified retirement plans in case of hardship for plan years beginning after December 31, 2018.
- The Act requires the IRS to publish a simplified income tax return designated as Form 1040SR for use by persons who are 65 or older by the close of a tax year. The form is to be made available for such persons filing 2019 individual tax returns.
- The Act repeals the rule accelerating payment of certain estimated income taxes by large C-Corporations in 2020.
Tax-Extender Renewals for 2017 Tax Year
- Individual Extender Provisions
- Exclusion for discharge of indebtedness on a principal residence
- Treatment of mortgage insurance premiums as deductible qualified residence interest
- Deduction for qualified tuition and related expenses
- Business Extender Provisions
- Empowerment zone tax incentives
- 3-year depreciation for race horses two years old or younger
- 7-year recovery period for motorsports entertainment complexes
- Energy Extender Provisions
- Energy efficient commercial buildings deduction
- Credit for certain nonbusiness energy property
- Credit for residential energy property
- Qualified fuel cell motor vehicle credit
- Credit for construction of new energy efficient homes
Your Somerset advisor will continue to look for any opportunities for you regarding any of the above favorable changes for 2017 and later years. Feel free to reach out to your advisor for further clarifications.
