The IRS said Friday that it will soon begin processing tax deductions for homeowners who file tax returns for their current tax year.
The changes are part of a broader overhaul of the tax code that was rolled out in December.
Tax preparer-tax-return preparers will be able to file their own tax returns and make deductions for any of the things that are eligible for deductions, such as charitable contributions, education expenses, home improvements and other things.
The IRS is now in the process of creating a “customer guide” that will guide consumers on the proper tax-related deductions and credits they can claim.
The new rules are expected to begin to take effect next year.
The IRS said the new rules will allow tax preparers to file for deductions that help them make their tax-preparation expenses more tax-efficient.
The agency is also encouraging taxpayers to take advantage of the refundable tax credit that will apply to their 2018 tax returns, which can be worth up to $1,000 in 2018.
For example, a taxpayer who files a 2018 federal tax return with the refunded credit of $2,000 will be eligible to claim a $600 credit on his 2018 federal income tax return.
The refundable credit is meant to help taxpayers with high-deductible plans who are struggling to make ends meet.
The tax-refund credit is worth an additional $600 for taxpayers who file a return for the first time this year and another $600 if they are filing a return a second time.
For 2019 and 2018, the credit will be worth an extra $600 and $600, respectively.
For 2018 taxpayers who were already filing for the refund, they can now claim the $600 in 2018 and claim the credit in 2019, the agency said.
That will give them a total of $1.25 million in tax credits, which could help them reduce their tax bill.
The changes come after the IRS announced in December that preparers would be able, starting in 2020, to file tax deductions and tax credits for homeowners that were previously exempt from paying income taxes.
This will be a new tax-deferred provision that is part of the broader overhaul that the IRS is rolling out.