Let’s talk taxes!
We know it’s not anybody’s favorite subject, but tax season is one of the reasons we believe in the value of homeownership. With tax breaks on mortgage interest and property taxes, tax season doesn’t have to be quite so scary for homeowners.
Even with changes due to the Tax Cuts and Jobs Act, passed at the end of 2017, homeownership is still encouraged in the United States; which means people who own a home will still reap the benefits of tax breaks. That being said, you will want to discuss the changes with your accountant when you file your taxes this year.
Mortgage Interest Deduction
Going into effect this tax season, you can deduct mortgage interest for up to a total of $750,000 in mortgage principal. Before this year, homeowners could deduct mortgage interest up to $1,000,000. For the majority of our clients, these changes won’t have an impact on what they can deduct.
Property Tax Deduction
Property tax deductions, along with deduction for income or sales tax, are known as the state and local taxes, or SALT deduction. Currently, the SALT deduction is capped at $10,000 per year. If your property taxes are $10,000 or less, you can deduct the full amount. If you pay more in property taxes, you can deduct the maximum amount of $10,000.
Investing in homeownership comes with many benefits, including building up equity, a forced savings account, and having control of your living space. Taking advantage of the tax benefits that come with owning a home is another one of those benefits. The mortgage interest and property tax deductions are the two deductions that will probably have the most impact for homeowners, but you may see even more deducted depending on your situation. We always advise you to speak with your tax accountant to go over all deductions in more detail.
And for those of you who have more questions about the mortgage loan process? We have your covered. Contact us today!