Change Your 2018 Tax Return to Claim Reinstated Tax Credits and Deductions
Tax year 2018 was one of the toughest in recent history thanks to the Tax Cuts and Jobs Act, and the Tax Expansion Act passed in December 2019 is about to complicate matters. Alternatively, you may be eligible to file a revised 2018 tax return and claim additional credits and deductions.
In late 2019, Congress passed a large spending bill (in part to avoid government shutdown). This bill was amended to reinstate several tax deductions and credits that were not previously considered in the 2018 tax year.
Since the amendment itself is 58 pages long, MarketWatch helpfully summarized the credits and deductions that you can request retroactively:
* Withholding up to $ 4,000 for college tuition.
* Duty free for forgiven principal mortgage debt.
* Withholding the principal amount of mortgage insurance premiums.
* Tax credit for energy efficient home improvements.
* Tax credit for fuel cell vehicles.
* Tax credit for electric motorcycles.
* Tax credit for refueling equipment.
* Health Insurance Tax Credit (HCTC) but you probably don’t qualify.
* Lots of provisions for disaster relief.
If you think you can reduce your 2018 tax burden with one of these recovered tax deductions or deductions, you will want to file an amended 2018 tax return. (If you’re curious, that’s Form 1040X .) You won’t be able to amend your tax return online; you will need to print and submit the forms to the IRS.
Typically, you have three years after the filing date of your original tax return to file the amendment (or two years after any taxes owed, whichever comes later). MarketWatch suggests that you may take even longer than the three-year deadline if you file an amended return to claim one of the retroactive tax deductions and deductions, but I would advise not to wait three years to find out.
Here’s my advice: if you think you might need to file an amended 2018 tax return, talk to an accountant or tax professional. Tax year 2018 has been confusing enough in itself, so make sure you know exactly which of these new credits and deductions you can qualify for before you start filling out any forms or submitting anything to the IRS.
And once you confirm that these recovered credits and deductions are applicable to your 2018 tax situation, submit the revised tax return as soon as possible.