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Tax Cuts & Jobs Act

Does Uncle Sam want you to own a home? Not necessarily, but the real estate industry does, and its members lobby politicians hard to create and maintain tax benefits for home ownership. Since the Tax Cuts and Jobs Act doubled the standard deduction a few years ago, far fewer taxpayers benefit from itemizing deductions like mortgage interest and property taxes, and those who do tend to need the extra savings the least because they’re in the highest income brackets.  Search homes for sale in Flying Horse, Colorado Springs, CO here:  http://www.rehava.com

Still, you should take advantage of whatever tax benefits you qualify for as a homeowner, and while many (if not most) households will see little to no tax savings, benefits such as the home office deduction and mortgage credit certificates can help even if you don’t itemize.

How Home Tax Deductions Work

First, a quick lesson (or refresher) on income tax deductions:

A deduction reduces how much tax you owe, but only if you itemize. It only makes sense to itemize when your itemized deductions are higher than the standard deduction. The dollar amount of itemized deductions in excess of the standard deduction is the only part you save money on. Multiply this excess amount times your marginal tax rate to see how much the deduction saves you.

 

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