Tax time again folks so starting up this thread.
Started doing some initial calculations and just now taking notice of some of the big changes.
Standard deductions that were in place for the 2017 tax year and those now in effect for 2018 and 2019:
Filing Status
2017 Standard Deduction
2018 Standard Deduction
2019 Standard Deduction
Single or Married Filing Separately
$6,350
$12,000
$12,200
Married Filing Jointly
$12,700
$24,000
$24,400
Head of Household
$9,350
$18,000
$18,350
Mortgage interest still is deductible, but...
The deduction for mortgage interest is one of the most popular U.S. tax breaks. In fact, tax benefits like these are often a primary reason Americans decide to buy a home. Fortunately for many homeowners, the mortgage interest deduction survived the tax reform efforts, but it did receive two major modifications.
First, the cap (or limit) on the total deduction allowed has been reduced to the interest on up to $750,000 of qualified residence debt, or mortgage principal on a primary or secondary home. This is down from the previous limit of $1 million, although mortgages obtained before December 15, 2017 are grandfathered in to the higher limit.
Second, the previous additional limit that allowed taxpayers to deduct interest on as much as $100,000 of home equity debt has been eliminated. To be clear, interest on a home equity loan (such as a HELOC) may still be used as a deduction, but if and only if the loan was used to substantially improve your home. In this case, it becomes qualified residence debt and is counted as part of your $750,000 cap.
The SALT deduction: Bad news for high-tax states
The biggest tax deduction by dollar amount that Americans have taken advantage of in recent years is the deduction for state and local taxes -- also known as the SALT (State and Local Taxes) deduction. Specifically, Americans have been able to deduct the following:
State and/or local property taxes, such as those paid on a personal residence, automobile, or other personal property.
State and local income taxes or state sales taxes, whichever results in the larger deduction. Generally speaking, income taxes are the better deduction, but the option to deduct sales tax allows residents of states without an income tax to benefit, as well. If you choose the sales tax option, you don't need receipts -- the IRS provides a calculator to determine this deduction.
Starting with the 2018 tax year, however, the SALT deduction is limited to a total of $10,000