New Budget (and Tax Deal)

Feb 09, 2018 By Nielsen Law Group In Taxation No Comment

This morning (early) Congress passed and the President signed the new budget deal to restart government operations (after a several hour shutdown). Included in the bill were a number of resurrected tax provisions that had all expired at the end of 2016…yes, that’s correct, 2016. So now after the filing season has begun, the rules for 2017 have changed again. Here are the highlights:

  • Forgiven debt on residential mortgages are excluded from income. And the treatment is even more favorable than in 2016.
  • Mortgage Insurance Premiums – deductible again.
  • Above-the-Line deduction for up to $4,000 in Higher Education expense (subject to certain income limits as it was in 2016).
  • A number of “Green” provisions including credits for 2-wheeled plug-in vehicles, the Energy-Efficient home improvement credit and a credit for small wind/geothermal residential energy projects.

Now for the “bad” news. These credits were all “extended,” which means that they expire again, well, they’ve ALREADY expired again, on January 1, 2018. So Congress will likely be at this little game again – considering the extension of these tax deductions as some point in the future.

Always interesting in Washington DC!