Mortgage Interest and TCJA

Home ownership remains an enduring hallmark of the American Dream. Mortgage interest is an itemized deduction which like many other deductions, is changed under Tax Cuts and Jobs Act. Mortgage interest can be and often is the biggest itemized deduction for individuals, allowing taxpayers to itemize deductions vs. using the standard deduction. Home Equity loan interest is generally not deductible under TCJA. Deductible real estate property taxes that add to the tax benefit of home ownership are now subject to capping. Into the mix, the standard deduction under TCJA is raised to $24,000 in 2018 for married couples filing joint returns vs. $12,700 in 2017.

These changes in mind, buying a home or making home improvements in the last half of 2018 will require some planning to avoid surprise bills at tax time. More with SoundCPA Insights.