August 31, 1993
New Tax Bill Gives Immediate
Refunds to Some Taxpayers
WASHINGTON - Recently signed legislation has three retroactive
provisions which may result in refunds for many taxpayers. The new
law reinstates for all of last year some tax benefits which had
expired on June 30, 1992.
About 3 million self-employed persons may be able to claim a
larger 1992 deduction for health insurance premiums. To qualify,
they must have a net profit from self-employment or receive wages
from an S corporation in which they were a two percent or more
shareholder. They also must not have been eligible for coverage by
health plans sponsored by their employers or, if filing jointly,
their spouses' employers.
To claim this deduction for the second half of 1992, qualified
taxpayers can use the worksheet on page 21 of the 1992 Form 1040
instructions. They should substitute their full-year payment total
for the half-year figure on the first line and use 100 percent
instead of 50 percent on line 5 of the worksheet. They should then
refigure their tax and claim any refund by filing Form 1040X,
Amended U.S. Individual Income Tax Return.
Taxpayers who received financial educational assistance from
their employers in 1992 may also be entitled to refunds of income
and social security taxes paid. The exclusion from income of up to
$5,250 of such benefits applies retroactively to July 1, 1992. The
IRS expects to issue guidance soon on how employers and employees
can receive reimbursement for social security and income taxes paid
on these benefits.
The new legislation also repeals the treatment of charitable
contributions of appreciated property as a tax-preference item for
determining the alternative minimum tax (AMT). This means that for
AMT purposes, taxpayers will not be limited to deducting the
property's cost rather than its current value.
For tangible personal property, this repeal is retroactive to
July 1, 1992, and could result in refunds for 1992. For intangibles
and real property, the change is retroactive to January 1, 1993.
Taxpayers who included this tax-preference item in computing their
1992 AMT should refigure their tax and claim any resulting refund by
filing Form 1040X.
Taxpayers can get Form 1040X at local IRS offices or by calling
Previous | Next
1993 IRS News Releases | News Releases Main | Home