Page 20 - Supplement to Income Tax 2020

Additions & Corrections to the Text of Your Income Tax 2020

Floor for personal casualty or theft loss from qualified Medicare Part B and D premiums for 2020 (page
disasters (pages 432, 434). The Taxpayer Certainty 636). See pages 7-8 of this Supplement for the 2020
and Disaster Tax Relief Act expands the definition Medicare Part B premiums and the Part B and Part
of qualified disaster losses to include major disasters D premium surcharges, which generally are based on
declared by the President from January 1, 2018, your MAGI for 2018.
through February 18, 2020. A net qualified disaster Deduction for commercial buildings reinstated and
loss is subject to a $500 floor on Form 4684, rather extended (page 692). The deduction for energy-
than the regular $100 floor for losses on personal-use efficient buildings was reinstated for 2018 and 2019
property, but the 10% of adjusted gross income floor and extended through 2020 by the Taxpayer Certainty
does not apply. See the new law discussion at page 5 and Disaster Tax Relief Act.
of this Supplement.
General business credits reinstated and extended
Health coverage tax credit (page 521). The Taxpayer (pages 706-707). Numerous business credits that
Certainty and Disaster Tax Relief Act extends the expired at the end of 2017 were reinstated for 2018
health coverage credit one year through 2020. See the and 2019 and extended through 2020 by the Taxpayer
new law discussion at page 4 of this Supplement. Certainty and Disaster Tax Relief Act. These include the
Indian employment credit, the biodiesel and renewable
Home energy credit reinstated and extended (page fuels credit, and the energy-efficient homes credit.
522). Subject to the $500 “lifetime” limit and other
prior law limits, the credit for insulation, storm Extension of livestock replacement period (pages 442,
windows and other qualifying energy-efficient home 708). In Notice 2019-54, the IRS provides certain
improvements was reinstated for 2018 and 2019 and farmers and ranchers an extension to the four-year
extended through 2020 by the Taxpayer Certainty and replacement period that generally applies when
Disaster Tax Relief Act. See the new law discussion at livestock is sold due to drought. The Appendix to the
page 4 of this Supplement. Notice has a list of qualifying counties.

Credits reinstated and extended for qualified fuel-cell QBI deduction limitations (page 709). Under
vehicles and two-wheel plug-in electric vehicles (page “Limitations,” the second sentence should read as
525). These credits were reinstated for 2018 and 2019 follows: “Your deduction is the lesser of (1) 20% of
QBI, or (2) the greater of (a) 50% of the total W-2
and extended through 2020 by the Taxpayer Certainty wages paid by the business to employees, or (b) 25%
and Disaster Tax Relief Act. See the new law discussion of W-2 wages plus 2.5% of the unadjusted basis
at page 4 of this Supplement.
immediately after acquisition (UBIA) of “qualified
Section 529 plan withdrawals expanded (page property” owned by the business.”
610). Under the SECURE Act, up to $10,000 of Increased expensing limit for empowerment zone
student loan repayments (principal and interest) property (page 729). The Taxpayer Certainty and
can be withdrawn tax free from a Section 529 plan, Disaster Tax Relief Act reinstates for 2018 through
starting with 2019 distributions; $10,000 is a lifetime 2020 an up-to-$35,000 increase to the first-year
exclusion limit. Also qualifying are distributions used expensing limit for the cost of qualifying empowerment
to cover costs (books, supplies, equipment, fees) of zone property.
participants in apprenticeship programs registered
with the Secretary of Labor. Three-year MACRS recovery period for racehorses
reinstated and extended (page 729). The three-
Social Security Worksheets (pages 629-630). Some of year recovery period for racehorses two years old
the line numbers for Worksheets 34-2, 34-3 and 34-4 or younger was reinstated for 2018 and 2019 and
are incorrect. See pages 17-18 for corrected versions of extended through 2020 by the Taxpayer Certainty
the Worksheets. and Disaster Tax Relief Act.

16 | Supplement to J.K. Lasser’s Your Income Tax 2020