Wednesday, January 10, 2018

By John Voket The web is lighting up with information and advice on how the recently signed 'GOP Tax Plan' will impact homeowners.

As always, one of the best places to begin your fact-finding is at IRS.gov, which is issuing regular news updates as developments regarding the new tax plan are announced.

Should you have pre-paid your 2018 property taxes in 2017? Should you even bother trying to itemize home-related deductions anymore?

Jordan Wathen at The Motley Fool (fool.com) reminds filers that under the new tax plan, the home mortgage deduction would be limited to $750,000 of indebtedness starting with the 2018 tax year - down from $1 million.
However, Wathen says filers who have mortgages issued before the Dec. 15, 2017 will see their cutoff grandfathered in, and will still be able to deduct interest on up to $1 million of mortgage-related indebtedness.

At businessinsider.com Brennan Weiss writes many high-end homeowners could be paying more in property taxes next year because of a new rule that caps the amount of state and local tax deductions at $10,000.

Since there is currently no limit on this deduction, people have been rushing to prepay their property taxes before the cap kicks in at the turn of the new year.

Weiss says high-income taxpayers who itemize their deductions currently benefit the most from the unlimited state and local tax deduction, commonly referred to as SALT deduction. Individuals with incomes greater than $100,000 make up roughly 90 percent of the deductions’ beneficiaries, according to an analysis by the Tax Foundation.

This means homeowners in high-income and high-tax states like New Jersey, New York, California, Illinois, Texas, and Pennsylvania will bear the brunt of the change.

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