5 Things to Know About Mortgage Deductions in 2018
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. homeownership. Here are 5 Things to Know About Mortgage Deductions in 2018.
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 The new bill repealed the deduction on home equity debt interest through Dec. 31, 2025.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. If you’re ready to sell your Phoenix home or buy a home in Phoenix in 2018, please contact The Voss Team today.
The Voss Team
7111 West Bell Road Ste 101
Glendale, Arizona 85308
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