As a taxpayer, it's important that you take full advantage of any tax cuts that you are eligible for. A Virginia tax attorney can help you to take advantage of tax breaks so you can save as much as possible on your taxes.
Keeping tabs on the tax cuts that you are eligible for can be complicated because there are many tax breaks that phase out or expire unless extended by congress. Sometimes, these tax breaks are not extended at the beginning or even in the middle of the tax year, but instead are extended at the very end of the year -- but the extension applies retroactively. All of this can make it really confusing to figure out what the rules are when you're filing your taxes.
For many taxpayers, for example, a number of tax breaks had expired in 2016 and weren't going to be claimable in 2017 – until congress renewed the expired tax breaks in the Bipartisan Budget Act of 2018.
Tax Breaks Renewed in the Bipartisan Budget Act of 2018
Some of the many tax breaks renewed in the Bipartisan Budget Act of 2018 include:
- A deduction for PMI: Premiums for private mortgage insurance were tax deductible in 2016, but the tax deduction had expired for 2017 until it was renewed by the bipartisan budget deal. Private mortgage insurance might be required if you don't have 20% to put down when you buy a home.
- A deduction for energy efficient improvements to your home: If you improve your house by doing things like upgrading to more energy efficient windows, you could get a tax credit for up to 10 percent of the costs of improvements. There are maximum caps for different purposes. For example, for windows, you can deduct just $200 maximum even if the windows end up costing you more.
- A tax credit if you install solar, wind energy, or geothermal for your home: All of these energy efficient improvements can lower your electricity bill and your tax bill, especially as a credit is a dollar-for-dollar reduction in your tax liability and is much more valuable than a deduction.
- A tax credit for energy efficient vehicles: If you purchase a fuel-cell vehicle, you could get a trust administrator credit equal to anywhere from $4,000 to $40,000 depending upon the size of the vehicle (obviously, larger vehicles come with bigger credits).
- A deduction for educational expenses: Tax breaks for tuition had also expired for 2017 but have now been renewed. You may be able to deduct up to $4,000 for qualifying educational expenses if you meet eligibility requirements, thanks to the budget deal.
Virginia tax attorney Kevin Thorn can provide you with help in determining what tax breaks you are eligible for and what the rules are for tax breaks applicable to you under the current law. You should reach out to an attorney for assistance to make sure you are not paying more than you need to when you send your taxes to the IRS – and to be prepared for a higher tax bill if tax breaks that you were counting on expired.
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