Mariner is certain that Donald does not want primary television coverage on the damage he is doing through his Cabinet and his Executive Orders. One area that may affect many of us is how Donald is stripping the tax laws. Thanks to the accountants who help mariner with his taxes, the following was sent to mariner via USPS. Changes that affect most taxpayers are cancellation of mortgage insurance and tuition deductions.
“On December 20th, President Trump signed into law the Secure Act, a funding bill that also included several tax ramifications. The legislation included the renewal of 34 expired or expiring provisions along with various healthcare tax repeals, changes for not-for-profit organizations, and changes for retirement savings among other provisions. A few highlights of the bill include:
Extenders
Extensions of the following expired or expiring credits through 2020:
New Markets Tax Credit
Work Opportunity Tax Credit
Biodiesel and Renewable Diesel Credit (extended through 2022)
Alternative fuel and fuel mixture credit
Repeal of health insurance plans “Cadillac” tax.
Extension of the PCORI fee (excise tax) on self-insured health plans through 2029.
Section 179D deduction for Energy Efficient Commercial Buildings through 2020.
Energy Efficient Homes Tax Credit under Section 45L for homes produced before January 1, 2021.
Deduction for mortgage insurance premiums for 2018, 2019, and 2020.
Deduction for qualified tuition and fees deduction for 2018, 2019, and 2020.
Retirement Provisions
Repeal of maximum age for contributions to traditional IRA’s (previous age limit was 70.5).
Required minimum distributions start at age 72 instead of age 70.5 (not applicable for those that turned 70.5 before December 31, 2019).
Up to $5,000 can be distributed penalty-free for birth of child or adoption from IRA’s or defined contribution plans.
Non-spouse inherited IRA’s required to take distributions over 10 years instead of beneficiary’s lifetime. There is no requirement to take distributions during the first 9 years, rather, the account has to be emptied by the end of the 10th year.
Other Provisions
Kiddie tax reverts back to pre-TCJA and no longer uses trust tax rate tables. Applies to 2020 and future years but can be elected to apply to both 2018 and 2019.
Increase in various failure to file penalties for returns due after December 31, 2019.
Retroactive repeal of parking tax for tax-exempt organizations that provide transportation fringe benefits.
Up to $10,000 of 529 plan funds can be used to pay down student loans. The $10,000 is a lifetime limit per beneficiary.
What Was Not Included
The Secure Act does not address drafting errors made when the TCJA was signed into law. For example, the error related to the depreciable life of Qualified Improvement Property was not addressed.
The different effective dates for net operating loss deductions (NOL’s) was not updated. This may impact certain fiscal year taxpayers.”
If the reader is specifically impacted by these changes, it would be prudent to check out further detail.
Ancient Mariner