We have put together a summary of things we thought you would find important and relevant from the 2017 Tax Code Changes. Below are the high level takeaways.
The good news is that in 2018, you are probably getting a tax cut. The individual rates fall across the board. The new law not only lowers rates across all seven tax brackets, but lowers the threshold for each bracket. This applies to taxpayers who file jointly as well.
The new law also doubles the standard deduction to $12,000 for individuals and $24,000 for joint filers. For taxpayers with few itemized deductions, this means taking the standard deduction will exempt twice as much of your income from federal taxation.
What this means is potentially more money in your hands, which means stimulation to the overall economy!
Most people's home values don't exceed $750,000. The National Low Income Housing Coalition estimates that just 1.9 percent of mortgage originations from 2013 to 2015, exceeded $750,000 in value.
The new cap won’t apply to existing mortgages, just new ones. And because of the doubled standard deduction, this may not affect you if you forgo itemizing.
Good news for those individuals with pass-through entities. They will be able to take a 20% deduction when taxable income is less than 157,000 for single and 315,000 for married people. The change would allow real estate investors to take advantage of the new break.
The housing market is at an 11 year high! We are finally getting on the right side of the 2008 recession and ready to invest in homes again. The overall implications of the tax bill are a positive stimulation to the economy with income and growth potential on the horizon.