Feeling smug that you already filed your federal income taxes? Well, there's an odd chance that you might get an even bigger tax refund, if you qualify for some special tax breaks and take the time to file an amended return now for 2017.
The reason? We're looking at some zombie tax breaks that miraculously returned from the dead on Feb. 9 with the passage of a bipartisan budget act. The tax breaks had expired at the end of 2016. But they're only good, retroactively, for 2017 returns. And we only discovered all this a few weeks ago.
The problem? IRS systems and tax software initially weren't ready for any of these changes when the filing season began Jan. 29. After all, the breaks expired more than a year earlier. Typically, Congress moves to extend tax breaks before year end, but not this year.
"You can't make this stuff up," said Mark Steber, chief tax officer of Jackson Hewitt. "These are dollars in your pocket, so you don't want to look past them."
But you will have to figure out if any of these breaks apply to you, whether it's worth your time to file an amended return and how much money you might save. If you've not filed a tax return yet, keep these breaks in mind, as there could be some confusion about whether they're alive for 2017 or not. You can find more about what the tax crowd calls "extenders" at www.irs.gov/extenders.
The retroactive tax breaks include:
1) Another tax break relating to college tuition
The deduction for qualified tuition and related expenses claimed on Form 8917 can apply for the 2017 returns.
The deduction, which includes expenses for both undergraduate and graduate courses, could reduce your taxable income by up to $4,000. So if you're in a 25 percent tax bracket, that could be a $1,000 savings. This is an above-the-line deduction, meaning you do not need to itemize deductions to claim it.
But before you jump at this one, consider this: You cannot take this break with other education credits. So even if you filed earlier, you might have tapped into a better education credit.