What do the recent tax changes mean for you? Let’s take a look.
Are you aware of the tax changes that were made in 2018? Here are the four things that have been affected:
1. Mortgage interest deduction. For a married couple, the deduction is capped at $750,000—it used to be $1 million. This means that if you have a $1 million mortgage, you don’t get to deduct interest for $250,000 of it.
2. Discount points. You can write off your discount, but it has to be specifically for discount points—not origination. If you paid 1% to get your interest rate lowered, you can still write it off. You can also no longer write off private mortgage insurance.
3. Property taxes. These taxes are now capped at $10,000 dollars. If your property taxes are $15,000, you can only write off $10,000 of it.
4. Home equity lines. Let’s say you had $500,000 equity—you could pull money out and use it as a tax deduction. The only way you can use it now, however, is if you use it for remodeling or renovation. And remember, your equity line and mortgage payment deductions can’t go over $750,000 because of the cap.
If you have any questions or need more information, feel free to reach out to me. I look forward to hearing from you soon.