The December 2019 government funding bills included many tax provisions. The economic stimulus packages enacted by Congress in March 2020 to counteract the effects of COVID-19 added even more tax changes. With these additional new rules, as well as the annual inflation adjustments, and the result is that there is a multitude of tax changes for the 2020 tax year and beyond. These recent tax law changes have extended or amended many expiring tax law provisions.
A provision is considered an “expiring provision” if, at a statutorily specified date, the provision expires or reverts to the law in effect before the present-law version of the provision. A suspension or deferral of the effective date of a provision is not considered an expiration of the present-law version of the provision.
Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year. For these provisions, the expiration dates apply to calendar-year taxpayers. The expiration dates of such provisions may differ, however, for fiscal-year taxpayers or taxpayers with short taxable years.
The expiring tax law provisions that have been changed or amended include the following:
- Treatment of mortgage insurance premiums as qualified residence interest
- Reduction in medical expense deduction floor
- Deduction of qualified tuition and related expenses
- Energy-efficient homes credit
- Employer credit for paid family and medical leave
- Work opportunity credit
- Special rule for determining earned income
- Repeal of maximum age for traditional IRA contributions
- Increase in age for the required beginning date for mandatory distributions
- Expansion of section 529 plans
Tax savings may result from these affected tax deductions, tax credits, and other tax incentives. These provisions may reduce tax liability and even increase a tax refund. They affect businesses, self-employed, and individual taxpayers. Contact The Gartzman Law Firm to learn more.
The Gartzman Law Firm may help anyone interpret the effects of these extensions and amendments on their tax obligation. The Gartzman Law Firm may help taxpayers find effective solutions that may help any taxpayer solve problems with unpaid taxes. Call today at (770) 939-7710.