The tax law vote looms large in the near future even as we anticipate the largest winter holidays of the year. Yesterday, President Trump referred to the tax bill as one of the best holiday gifts the government has ever given to the middle income people of America.
Tax Bill Cause of Some High Anxiety for Potential Homeowners
As we have posted previously, some potential homeowners have questions about the concept of homeownership in the face of losing some of the tax benefits for owning a house.
Tax Worry Number One: Interest Deduction
In case you are not aware of it, under the new tax plan, “new homebuyers would now only be able to deduct interest on the first $750,000 of mortgage debt on a newly-purchased home.” The current stopping point is $1 million. Back in November, the House tried to make it $500,000. How much the change from a one million to a $ 750,000 cap worries you, depends quite a bit on where you live. “For instance, in New York City, nearly 64% of mortgages on homes sold this year were over $750,000, according to data from ATTOM Data Solutions.”
Tax Worry Number Two: New Limit on Property Tax Deduction
Again, if you live in high-tax states, you will not like the fact that the new legislation only allows you to deduct up to $10,000 in state and local property taxes plus income or sales taxes. Taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes.
Thus, if you live in a state that has high taxes like California or New Jersey, you will also owe more taxes to the federal government than states with lower rates.
Trumping the Tax Worries With the President’s Tax Credits: Some Solid Numbers
The president sees these two objections in a different light. Rather than worrisome limits and locales, he believes the boost of a bigger individual deduction and a revitalization of American businesses will off-set changes in rules for
property tax deduction.
By the way, here are some very important numbers, dear to the hearts at the white house, and maybe your heart also:
- The new tax rules Increase “the refundable portion of the child tax credit to $1,400, thanks to Rubio’s insistence. The overall child tax credit will increase from $1,000 to $2,000.”
- Likewise the tax package almost “doubles the standard deduction, from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for married couples filing jointly.”
However, many observers wonder if the boost in the “take-home pay and a possible surge in the economy from these numbers are are worth the costs of tax cuts for the wealthy and corporations.”
Hundreds of Pages of Tax Details
Chances are, you might already know about these worries. What you worry about are the details that lawmakers have not yet revealed.
The house will vote on Tuesday and the senate votes on Wednesday. This makes it possible we will all know the secrets of the 500 page tax bill as of Christmas Day. And the President hopes not only that the bill will pass, but that the IRS can begin some implementation of it as early as Feb. 2018. By the way, current mortgage owners can stop worrying because their numbers will be grandfathered into the new system.
A Special Holiday Message with No Tax
Just as we posted, about a year ago, the Holidays give us a great time to acknowledge the value of friends, clients and family. As the decorative lights glimmer and gleam, we watch them sparkle and shine in the eyes of children everywhere. We congratulate you and your families as you celebrate the Season of Christmas, Hanukkah, Kwanzaa, Winter Solstice, and New Year’s.
We genuinely recognize and thank you, old friends and new, for the friendship and business you have brought to us. We could not enjoy our success if it weren’t for your confidence and trust.
Palm State Mortgage Company thanks you for your support, and wishes you the Happiest of Holidays!