This is super important because it affects your taxes.
Hi everyone, Krista Mashore, Homes by Krista. The big question is, how does the tax reform effort H.R. 1 affect mortgage interest deductions? This is the first significant tax reform effort undertaken by Congress in more than years. The fear was that the mortgage interest deduction would be eliminated altogether. The great news is that didn’t happen. But here are the changes that may affect you. It reduces the limit on deductible mortgage debt to $750,000 for new loans taken out or after 12-14-2017 from the existing 1 million dollars. And good news, current loans up to 1 million dollars are going to be grandfathered in. Now listen, homeowners can refinance a mortgage debt existing before 12-14-2017 up to a million and still deduct the interest, so long as the loan, the new loan, does not exceed the amount refinanced. Number three repeals deduction for interest paid on home equity debt through 12/31/2025. Four, interest is still deductible on home equity loans if the proceeds are used to substantially improve the residence. Number , interest remains deductible on second homes but subject to the limits. Also, there was a concern that the state and local tax deductions, which includes property taxes, we’re going to be eliminated altogether. The good news is that didn’t happen. The final bill allows for itemized deductions of up to $10,000 for the total of state and local property taxes and income or sales taxes. That’s all folks. Now listen, I’m not a tax accountant or a financial planner or an advisor. Be sure to speak to your professional. For more information, anything real estate related, please feel free to reach out to me.
Remember as always, make it a great home selling and buying date, I’d love to assist you in the future.