The new tax bill has major changes on the Real Estate Tax Deductions. What does this mean? As every Homeowner or Homebuyer situation is different, I recommend that you speak with your Accountant or CPA.
The loss of Mortgage and Real Estate Tax Deductions may be offset by higher standard deductions and potential lower tax bracket.
Old Mortgage and Real Estate Tax Provisions
*Deductions of interest on $1,000,000 First Mortgage and $100,000 on a Second Mortgage.
*Real Estate Taxes can be deducted
*Capital Gains Taxes on the Sale of a Property can be exempted if it was your primary residence and you lived in it for 2 of the last 5 years. $250,000 for Singles and $500,000 for Married couple.
*SALT Tax-Non Real Estate Tax, allows deduction of State and Local Taxes.
New Mortgage and Real Estate Tax Provisions
*You can now deduct interest up to a $750,000 mortgage. For new mortgages, there are no HELOC deductions. Old mortgages are grandfathered in up to $1,000,000.
*You can only deduct a maximum of $10,000 of Real Estate Taxes, but a part of maximum of $10,000 of itemized deductions.
*Status-Quo Exemption on Capital Gains Tax on the sale of a property that you have lived in as a primary residence the last 2 of 5 years. $250,000 for Singles,and $500,000 for married couple.
*SALT Tax-Non Real Estate tax,also included in the maximum of $10,000 of itemized deductions.
2018 Standard Deductions and Exemptions
The new tax rules also make big changes to the standard deduction and exemptions.
The standard deduction is jumping BIG TIME this year! Below are standard deductions by tax filing status.
*Married Filing Jointly/Surviving Spouse $24,000
*Heads of Household $18,000
*Married Filing Separately $12,000
2018 Income Tax Brackets
Rate Individuals Married Filing Jointly
10% Up to $9,525 Up to, $19,050
12% $9,526 to $38,700 $19,051 to $77,400
22% $38,701 to $82,500 $77,401 to $165,000
24% $82,501 to $157,500 $165,001 to $315,000
32% $157,501 to $200,000 $315,001 to $400,000
35% $200,001 to $500,000 $400,001 to $600,000
37% Over $500,000 Over $600,000
The FD Allen Group Inc is ready and available this New Year, to assist all new Home Buyers with answers to questions and navigating the Home Buying Process in NYC, whether its through Mortgage Financing or All Cash Purchases.
Call us today. We’ll take good care of you.
Frank Allen – Founder and CEO