Most Missouri residents will take the opportunity to save money wherever they can, and this usually includes doing what they can to avoid sending a big check to the IRS each year. For this reason, some taxpayers may be glad to hear that they can once again take advantage of some tax breaks that had disappeared prior to the new tax laws. Congress even made these deductions and credits retroactive to the 2018 tax year.
Missouri homeowners can once again deduct their private mortgage loan insurance premiums, but this deduction is limited to their primary residence. Another credit homeowners may have the opportunity to take advantage of involves improvements made to their primary residence in order to make it more energy efficient. It may take some research to determine what improvements qualify for this credit.
People who sold their homes in 2019 for less than the debt owed on them would have ended up paying taxes on any amount forgiven by their lenders since the IRS considers that income. However, Congress revived the mortgage loan debt forgiveness deduction. This could save some individuals thousands of dollars in taxes. The last deduction reinstated is for interest on student loans.
Even though the standard deduction was increased and most taxpayers will not need to itemize in order to achieve the maximum savings, some may benefit from these tax breaks. The tax laws can be complicated, and figuring out which way would achieve the most savings or the maximum refund without ending up risking an audit is not always an easy task. Anyone with a complicated tax situation would most likely benefit from working with a tax attorney who can help in that endeavor.