Budget deal changes tax law for 2017 returns being prepared now
This morning President Trump signed into law a new budget deal that ends the very brief government shutdown. It contains some good news for taxpayers, but a logistical nightmare for the IRS and for tax preparers. Some tax breaks that expired at the end of 2016 have now been reinstated retroactively for 2017. These include a deduction for mortgage insurance premiums for certain taxpayers, an exclusion from cancellation of debt income for homeowners, some expired energy related credits are returning and various other provisions. I will post updates as they become available, but for now here’s a summary of the tax changes that affect 2017.
Now for the nightmare. There is no place on the current 2017 tax forms to take advantage of these tax savings, which means in the middle of tax season, IRS will have to redesign various tax forms, all tax software will have to be reprogrammed for the changes and then there is the issue of how much time tax preparers have to learn the new changes and let their clients know about them. Anyone who has already filed but is eligible for one of these retroactive benefits can file an amended return to take advantage of the additional tax savings. We are available to help with this or any other tax related concerns you may have.