The Tax Cuts and Jobs Act became law at the end of 2017, and many homeowners are still confused as to how this will affect tax deductions. One of the many benefits of owning a home involves deducting interest payments incurred from having a mortgage. Property tax deductions are also used frequently to curb high tax bills. President Trump’s Tax Cuts and Jobs Act has altered these two deductions, and those living in costly areas are feeling the effects the most.
Deducting Mortgage Interest During Tax Season
President Trump’s Tax Cuts and Jobs Act altered the cap for mortgage interest deductions. Before the passage of this act, homeowners were able to deduct mortgage on properties valued at $1,000,000 or below. Now, this cap has changed to $750,000 for those who purchased a home after December 14th of 2017. This real estate jargon can be confusing, and it is advisable to reach out to professionals like Sun West Mortgage to help with this transition.
Adjusting Property Tax Deductions
With President Trump’s new tax laws taking effect, homeowners are no longer allowed to deduct the full amount paid for property taxes. These deductions have now been capped at $10,000 and may affect how households budget after-tax season. Many families should contact mortgage-centric firms such as Sun West Mortgage to receive more clarity on these changes.
President Trump is undoubtedly a controversial figure, and these tax changes have followed suit. The implications of the Tax Cuts and Jobs Act will reveal themselves over time.