The new tax law that President Donald Trump signed into law late December 2017 will have massive, sweeping impacts on both the individual and business taxpayer. We are beginning to digest the new code. The changes involve so many parts of the code that the tax affect for each taxpayer has the potential to be profoundly different based on children, types of income, local taxes and more. We will highlight highly impact areas over a series of blog posts to help explain specifics to our clients and readers.
You Own a Home
If you live in a high-tax area you will be especially affected by a new $10,000 limit on local and state taxes you can deduct on your Schedule A.
For our clients in FL, unless you are in a very expensive area you potentially will not feel any pain in this area, but our Atlanta clients in high-taxed areas of Decatur, along with large homes in Fulton County plus 6% GA state income taxes will feel the pinch.
This blog is about currently owning a home, so your current primary mortgage interest deductions won’t be affected, but if you are considering a move, that will be changes that you need to consider (another blog). Note that fewer people will itemize, though since the new standard deduction has been increased substantially.
Taxpayers that are single (and married separately) will see this rise from $6,350 to $12,000, head of household jumps from 9,350 to 18,000, and married filing jointly folks go from $12,700 to now $24,000.
Homeowners, starting with tax year 2018, will also lose their ability to deduct the interest on home-equity loans .
Our next blog will talk about the changes in buying and selling a home and the impact on new mortgages and holding periods on sales of your primary residence