2017 Tax Extenders

We take a pause in our 2017 Tax Cuts & Jobs Act (TCJA) updates to pass along the highlights of the Bipartisan Budget Act of 2018, which included several “extender” provisions which could affect your 2017 tax return.

For individuals, the following provisions have been extended for one year through 2017:

  • Mortgage insurance premiums paid in connection with acquisition indebtedness on a principal residence.
  • Qualified tuition and related expenses for higher education can be deducted above-the-line. The maximum deduction is still $4,000 and begins to phase out when income reaches $130,000 for taxpayers filing married filing joint.
  • Exclusion of income from discharge of indebtedness on a principal residence. The debt must be discharged before January 1, 2018 and is capped at $2M for taxpayers filing married filing joint.

The following energy provisions have been extended for one year through 2017:

  • Credit for certain nonbusiness property such as insulation, energy-efficient windows and doors, stoves that burn biomass fuel and certain roofs. Credit is also available for high-efficiency heating, air-conditioning systems, and water heaters. Improvements must have been in place by December 31, 2017 and the lifetime limit of $500 still applies.
  • Credit for residential energy property such as qualified solar electric systems, solar water heaters, fuel cell property, small wind energy property, and geothermal heat pumps.
  • Qualified fuel cell motor vehicle credit
  • Alternative fuel vehicle refueling property credit
  • Credit for construction of new energy efficient homes
  • Energy efficient commercial buildings deduction
  • Several other energy credit or deduction provisions related to renewable power facilities, biofuels, or other alternative fuels.

For businesses, the following provisions have been extended for one year through 2017:

  • 3-Year depreciation for race horses two years old or younger
  • Expensing rules for certain film, television, and live theatrical productions
  • Domestic Production Activity Deduction includes production activities in Puerto Rico, as long as gross receipts from Puerto Rico were taxable for federal tax purposes.
  • Other provisions affect the mining, railroad, and timber industries or credits related to the Indian employment tax credit and American Samoa economic development credit.

If you would like additional information or to discuss the topics mentioned, please contact one of our Tax Services Group partners Jim Wagoner, CPA, Brandon Cook, CPA, or Marie Jett, CPA.