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IRS Extends ‘Popular’ Tax Provisions

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The Internal Revenue Service released Wednesday the list of tax provisions extended for the 2019 filing season.

“Popular” tax provisions extended, the IRS said, are:

  • Deduction for above-the-line qualified tuition and related expenses claimed on Form 8917, Tuition and Fees Deduction;
  • Deduction for mortgage insurance premiums treated as qualified residence interest, claimed on Schedule A, Itemized Deductions;
  • Deduction for unreimbursed medical and dental expenses as the floor was lowered to 7.5% of adjusted gross income and claimed on Schedule A, Itemized Deductions;
  • Credit for nonbusiness energy property claimed on Form 5695, Residential Energy Credits; and
  • Income exclusion for canceled debt for qualified principal residence indebtedness where the taxpayer defaulted on a mortgage that they took out to buy, build or substantially improve their main home claimed on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness

The IRS notes that recent legislation also modified the rules related to the “Kiddie Tax” for certain children who may be able to calculate their tax based on the tax rate of the child’s parent.

For tax year 2019, taxpayers can elect this alternative application for the tax on their unearned income by completing Form 8615, Tax for Certain Children Who Have Unearned Income, differently depending on their election.

Taxpayers who make this election for 2019 must include a statement with their return specifying “election to modify tax of unearned income.”

Disaster tax relief was also enacted for those affected by certain federally declared disasters. This includes an increased standard deduction based on qualified disaster losses and an election to use 2018 earned income to figure the 2019 earned income credit and additional child tax credit, the IRS explains.

Certain taxpayers affected by federally declared disasters may be eligible for an automatic 60-day extension for filing, paying their taxes, and other administrative deadlines, according to the IRS.

“Special rules may apply for taxpayers who received a distribution from an individual retirement arrangement, profit-sharing plan or retirement plan and their main home was in one of the federally declared disaster areas eligible for these special rules,” the IRS states.

— Check out IRS Falling Behind in Issuing Tax Reform Guidance: GAO on ThinkAdvisor.