4 Tax Breaks You Didn’t Know Were Gone, Back in 2019

Don’t call it a comeback! A tax deduction comeback that is!

You probably wouldn’t. You probably didn’t know any left. But they did. And now they’re back! “But wait Mr. Tax man, spreadsheet, glasses guy… which ones? Please, oh please, won’t you give us the deets!?” Read on my dear child, read on.

You see, here at ICG, we’re tax people. And when tax deductions go away, we get sad, really sad. A sadness that can only be surmounted by the unfettered grief of much worse… tax credits going away! “Oh Martha! Take my eyes but don’t take my credits!”

While Congress was passing the 2017 tax overhaul known as the Tax Cuts and Jobs Act, the sun was setting on a plethora of popular deductions and credits. In December of 2019, however, many of these were reinstated retroactively back through 2018.

Here are 4 of the most popular:

Tuition and Fees Deduction

Prior to 2018, taxpayers were able to either deduct a portion of their tuition payments or claim the American Opportunity Tax Credit/Lifetime learning credit. It could never be both. And in 2018, your choices were further narrowed down.

In 2019 taxpayers can again deduct their tuition and fees. The deduction ranges from $2,000-$4,000 depending on income level and filing status.

Mortgage Insurance Premium Deduction

FHA/VA mortgage holders listen up! You know that pesky premium you pay each month to ensure the bank gets their money should you default on the mortgage? That disappeared in 2018. In 2019, it’s back! Taxpayers can now deduct all mortgage insurance premiums paid during 2019.

If you bought a house during the year and paid a hefty upfront mortgage insurance premium, you can deduct a portion of that too. The upfront premium is amortized over the lesser of the life of the loan or 7 years.

It is important to note that this deduction phases out at certain income levels.

Energy Efficient Home Improvements Credit

Taxpayers that made energy efficient improvements to their home can once again claim a credit of up to $500

$500 is the maximum lifetime credit one can claim so if you use it all in one year, that’s all you get. If you use $300 this year, you’ll be eligible for another $200 over the course of your lifetime.

There are no guarantees that this credit remains in place forever, so if you are thinking of making improvements to your home, 2020 might be your year. The credit is extended through 2020.

Medical Expenses in Excess of 7.5% of AGI

This deduction never went away but it was set to increase to 10% of AGI in 2019. The threshold remains at 7.5% for 2019

Honorable Mentions

  • Credit for fuel cell vehicles- can range from $1,000-$4,000 for cars and light trucks and up to $40,000 for heavier vehicles
  • Credit for plug in electric motorcycles- can be worth up to $2,500
  • Credit for alternative fuel vehicle refueling equipment- up to 30% of the costs

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