The IRS began accepting tax returns on Tuesday, ushering in a new tax season.
As usual, taxpayers have until mid-April — April 17 to be exact — to submit their returns to the federal agency, unless they file for an extension.
And while there has been a lot of chatter about recent changes Congress made to the federal tax code in December, most of the overhaul’s provisions won’t go into effect until the 2018 tax year. That means you won’t see many changes on your actual tax return as a result until 2019.
But there are two big changes this year for taxpayers.
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Here’s what to expect when preparing your tax return for the 2017 tax year:
HOME ENERGY TAX CREDITS
The tax credits that offset most energy improvements to your home expired in 2016. So, if you installed a bunch of energy efficient windows to your home in 2017, you no longer will be able to take advantage of those credits.
Also, this is the first tax season in a while that taxpayers will not be able to write off their Private Mortgage Insurance, also known as PMI insurance.
This insurance on your mortgage doesn’t protect homeowners — it protects the lender and can be expensive. This type of insurance is mandatory on FHA loans through the Federal Housing Administration.
“That will be huge for tax filers this year,” said Amy Peek, accountant and owner of Pittsburgh-based Peekz ConsultiN.
In the past, taxpayers who had itemized deductions were able to exclude between $1,000 to $3,000 in PMI insurance in addition to mortgage interest and property taxes, but the tax credits weren’t renewed by Congress, so that is no longer an option.
If you have any questions about how these changes will affect your bottom line, please don’t hesitate to reach out to us or make an appointment.
PHOTO CREDIT: Dave Crosby–Flickr–CC
Peekz ConsultiN LLC is a Pittsburgh-based accounting firm, located in the West Side, that caters to individuals, small businesses and nonprofit organizations. We aim to empower clients to help them take control of their finances and achieve their dreams.