5 Things You Need to Know About Your 2018 Mortgage Deductions
With the passing of the Tax Cut and Jobs Act, a lot is about to change financially for citizens in the United States. One of the ways this change will affect citizens greatly is how it will reflect financially for homeowners. Although this tax cut is for 2018 (meaning citizens won’t see changes until February of 2019), there will still be a dramatic change for U.S. home ownership. Here are 5 things you need to know about your 2018 mortgage deductions.
1.) All buyers will no longer have personal exemptions, but there is an increase in standard deductions.
2.) The new deductible property amount is at $10,000, and there could also be scaling back of the mortgage interest deduction. Previously homeowners could deduct interest up to $1 million, but that has been lowered to $750,000.
3.) If you’re planning on buying a second home, please be aware there are new deduction limits. After the $750,000 mortgage cap, the interest on your mortgage will no longer be deductible. However, this does not mean your entire mortgage is no longer deductible—just the difference. For example, if you are above your mortgage cap by $100,000, that amount will not be deductible.
4.) Deduction done for most homeowners can refinance mortgage debts that existed on Dec. 14, 2017, up $1 million and deduct the interest, as long as the new loan doesn’t exceed the original mortgage.
5.) The new bill repealed the deduction on home equity debt interest through Dec. 31, 2025. Interest, however, is still deductible if the home equity loan is used to substantially improve the home.
If you want to know more about making the most of your mortgage deductions in 2018, we recommend contacting a certified tax professional. And If you’re in the market to buy a home in Prescott or are interested in building a custom home, please contact Crystal Creek Builders. We offer a full array of services that starts with the initial planning and design phases of your new custom home, which includes a free lot evaluation and custom home design services for only $975.00.
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