Congress is notorious for waiting until the last minute to pass legislation changing tax laws for the year about to wrap up. It is not unusual for them to even delay action to early January… one year they went so far as to make changes in MAY affecting the prior year.

Last week, they really outdid themselves. True to form, they finally took action on typical year end “extenders” to reinstate provisions that technically expired prior to 2019, and President Trump is expected to sign it into law. But this time, some of those changes are put back into place going as far back as tax year 2017!

The main purpose of many of these provisions is to influence taxpayer behavior. For example, the home energy credit is now back again, which is great if it helps you decide to make energy improvements next year. But it’s a little late to help you decide to make that investment before the end of 2019… let alone in 2017 or 2018!

Now, if you already made those improvements in spite of there being no credit available back at the time, you may be able to amend your returns to claim the credit and perhaps get a refund. The problem is, for most taxpayers, the size of that refund may well be more than outweighed by the cost or “hassle factor” of amending returns.

This is just one example, there are many others. One has to wonder if somewhere behind the scenes, some group or another just succeeded in lobbying a windfall for themselves. In any event, as we always do, we’ll be digesting all the particulars of this latest tax opus and be ready to advise our clients how best to take advantage of it going forward.