Lawmakers are about to resurrect a package of tax breaks, bringing back a number of valuable expired deductions and credits.
"Tax extenders" are a series of temporary provisions in the tax code that have expired and must be cleared by Congress retroactively each year for filers to take them.
These breaks include a range of measures, including a deduction for qualified tuition expenses and mortgage insurance, as well as credits for two-wheeled electric vehicles.
The spending measure now goes before the Senate.
"It looks like it's chugging along and there's agreement to go ahead with the tax portion of this," said Mark Mazur, director of the Urban-Brookings Tax Policy Center.
"Deadlines help to concentrate the mind, and the deadline here is that Congress wants to go home for the holidays," he said. "It looks like they're going to get this done."
If these tax extenders become law, taxpayers who were unable to claim the breaks in 2018 will now have a chance to file an amended return and use them.
"Going back to 2018? What a pain in the absolute neck that's going to be for some people," said Jeffrey Levine, CPA and director of financial planning at BluePrint Wealth Alliance in Garden City, New York.
Nevertheless, it might be worth bringing your box of receipts to your accountant and weighing the cost of submitting an amended return for 2018 versus the deductions you might recoup.
"The mortgage insurance premiums can be rather significant for some people," said Levine. "Same with medical expenses."
Keep an eye out for these four key extenders if the measure passes.
If you have a child in college, you might be able to deduct up to $4,000 a year in higher-education tuition costs and other expenses.
This is an above-the-line deduction, so you don't have to itemize to get it. Originally, it expired at the end of 2017.
The private mortgage insurance tax extender allows you to deduct your mortgage insurance premiums.
Those premiums are an additional cost you pay each month if your original down payment was less than 20% of the sales price.
Starting in 2018, homeowners who itemized deductions on their tax return could deduct the interest on their mortgage and home equity loan or line of credit — up to $750,000 in total qualified residence loans.
The debt must go toward buying, building or substantially improving your dwelling to qualify for the interest deduction.
The extender would allow this break to apply to premiums paid up until Dec. 31, 2020. Originally it was set to expire at the end of 2017.
"The one that's most noteworthy would be the treatment of private mortgage insurance," said Nicole Kaeding, vice president with the National Taxpayers Union Foundation. "There are limits to it, but individuals who pay PMI should go back and see if they can file an amended return."
After the Tax Cuts and Jobs Act went into effect in 2018, taxpayers were permitted to deduct qualifying medical expenses that exceed 7.5% of their 2018 adjusted gross income.
Originally, this was set to expire at the end of 2018, and the threshold would go up to 10% of adjusted gross income.
Lawmakers want to keep the expense threshold at 7.5% through the end of 2020.
You can only claim the medical expense deduction if you're itemizing on your return. Remember that the standard deduction in 2018 was $12,000 for singles and $24,000 for married-filing-jointly.
Maybe you had a bad year in 2018, resulting in the foreclosure of your home or the short sale of your dwelling.
If your lender canceled or forgave the loan on your principal residence, there's a tax extender that allows you to exclude up to $2 million (if married) from your gross income for discharge of the debt.
Normally, the canceled debt is treated as income and subject to taxes, but this break offers some relief.
The bill would apply it to debt discharges occurring before Jan. 1, 2021.