Premiere Mortgage Services Inc. - Dana Bain

Tax Cuts and Jobs Act of 2017

February 1st, 2018 6:09 PM by Dana Bain

 

There is so much to talk about with the Tax Cuts and Jobs Act of 2017 it’s hard to know where to start.  What we do know is that 2018 is going to be a year of changes.



Today we are going to talk about itemized deduction:

  1. Medical Expenses – you now have to reach a floor of 7.5% of your adjusted gross income to claim any of this deduction.  That means if you have $100,000 in income then you must have OVER $7,500 in medical expenses in order to deduct any portion of your medical expenses.  (Please note, that if your health insurance is paid through your employer then this expense DOES NOT count towards your deductible medical expenses.)

 

  1. Mortgage Interest – there are two big changes here:

 

    1. Mortgage interest is now limited to interest paid on mortgage balances of $750,000 or less.  Therefore if your mortgage principal is OVER $750,000, this deduction may be limited. 
    2. If you have an equity line on your home, that interest is no longer deductible under the new plan.  (Please note this is subject to special rules so if you have questions, please ask your CPA when you have your tax appointment this year)

 

  1. State & Local Taxes – This one was all over the news and will affect many of us here in Massachusetts.  Basically you are limited to a $10,000 deduction.  That means that your state income tax, your excise tax AND your real estate taxes are all subject to this ceiling of $10,000.  If your real estate taxes are $15,000 and your state income tax is $5,000 – you used to take a deduction of $20,000 on your taxes…under the new rules your deduction will now be limited to $10,000.

 

  1. Charitable contributions –you can now give up to 60% of your adjusted gross income before your deduction is limited.

 

  1. Miscellaneous Deductions - We saved the best for last! Miscellaneous deductions are no longer allowed.  Yep you read that right, these are now gone.  If you are a policeman, firefighter, sales person or any other person that was used to taking mileage that was not reimbursed to you, union dues, professional fees, investment fees etc. as a deduction, well you don’t have to keep track of all this anymore.

On a good note in an act to try and simplify taxes for the “regular” person, the standard deduction has now been raised.  So for a married couple filing jointly, the standard deduction is now $24,000.  For a single person the standard deduction is now $12,000.  What does this mean?  Well the government says that you, the taxpayer, are allowed to choose whether you want to take the standard deduction or the itemized deductions.  Further, they say that you can take whichever deduction is worth more to you.  Due to the increased amounts for the standard deduction and restrictions as described above on the itemized deductions, there will be more people that will opt for the standard deduction in 2018.

At Premiere Mortgage Services Inc. MA Lic. NMLS 1498 we can help you with great recommendations for CPA's, Financial Advisors & Real Estate Professionals.  And for your home financing needs both for a purchase mortgage or refinance mortgage please reach out to us at 978-422-2311 or info@bainmortgage.com

Dana Bain  MLO NMLS # 18693 & Robin Dunbar Bain MLO NMLS # 18699

Stay connected with us at

http://danabain.mortgagemapp.com/

 

Premiere Mortgage Services Inc. / Boston Harbor Mortgage Your Mortgage Home Loan Market Price Leader.  where you’ll find the best mortgage rates and a loan program that's best for you. We’re Robin and Dana Bain, and we provide Massachusetts and New Hampshire mortgage loans for home purchases and refinancing. Dana Bain has been originating mortgage loans for over 30 years and we treat our clients like family.  


Premiere Mortgage Services Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

 

 

Dana K. Bain | President | MLO 18693

 

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