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I've been told it's all rolled into the standard deduction- $12,000 for single, $24,000 for joint/married. So you just take the standard deduction if everything falls under that, otherwise itemize, say if you have $14,000 in deductions for single. My dad, being single, will probably still itemize because he'll break the $12K mark, but my wife and I will more than likely not go over $16K, so we'll take the standard deduction.Quote:
Originally Posted by CavSct1983
Yes, mortgage interest deduction is still in effect up to 750k of principle, but you only claim mortgage interest when itemizing. So unless your itemized deductions exceed the 24K standard deduction for married couples, then you can't claim it. For me, I've itemized ever since we bought the house, but for 2018 taxes I'll come out ahead taking the new standard deduction.Quote:
Originally Posted by CavSct1983
I think a lot of people will. This is a very beneficial aspect to it, IMHO. I'm curious to see what my accountant says about the new tax bill.Quote:
Originally Posted by DenverGP
That's not the way it was explained when we bought. They intimated that it's a separate thing from itemizing. Had I known it's not, I would not have purchased. I have no reason to itemize that I'm aware of...
With a standard deduction, it's not like there's a refund of the difference between owed and the full amount, right? So I don't see how this is in any way beneficial to me.
Until this new tax change, the mortgage interest on most homes (certainly any in the denver area) was a large enough amount to instantly give you a benefit from using the itemized deductions.Quote:
Originally Posted by CavSct1983
In my case, I had just 3 itemized deductions : mortgage interest, state/property taxes, and charitable contribs. Mortgage interest accounted for most of it. I think my itemized deductions on my 2016 taxes were around 18k, compared to the old standard deduction of $12,600 for married couples.
In 2018, the married standard deduction will be $24,000 for married couples, so I'm getting an extra 6k worth of deduction from the new standard deduction.
And it's one less form to fill out when doing my taxes, and less records to worry about.
It feels like I'm getting screwed because I'm not benefiting from my mortgage interest, but I'm still coming out ahead.
I dunno what will be best. Frankly, I find it all utterly confusing and unnecessarily complicated. Last year I got screwed because I made the mistake of following the instructions on the w4 and it resulted in too little being taken out, so I owed. That was the first time in over 16 years that ever happened and it was angering. Ever since then I've wondered at least once a week if perhaps selling everything and just living in an RV, doing odd jobs under the table wouldn't be the best way to go. I feel no motivation to essentially engage in slave labor. ...something about the tree of liberty and all that worthless fudd crap. If I was single I'd hang it all up and live in the woods. oh well.
Will likely go to an actual tax person this year instead of H&R. I need to learn the loopholes. Glad I learned about parabolas in school.
Even if you were single and had a lot of mortgage interest, you still might come out ahead taking the standard deduction for 2018 taxes because state tax / property tax can no longer be taken as an itemized deduction.
This is why everyone in CA/NY/NJ is whining and thinking they are losing money. Previously they were itemizing to claim their massive state tax amounts. For most, if they just take the standard deduction, they'll come out ahead.
If you weren't itemizing before, then you weren't writing off your mortgage interest anyway. You just went from a $12,000 standard deduction for a married couple, to a $24,000 standard deduction for a married couple. You just benefited $12,000. If you were itemizing to write off your mortgage interest, then it was probably over $12,000, but way less than $24,000. So, just like below, feels bad, but still better. I called my accountant to specifically ask your question.Quote:
Originally Posted by CavSct1983
Quote:
Originally Posted by DenverGP
The mortgage interest deduction on loans is dropping from $1 million to $750,000 in 2018. If you take a loan for more than $750,000, you'll still get a deduction -- you'll just be able to claim it on the first $750,000 of the loan, though.
The idea is that instead of having to file a bunch of different forms to itemize to get a big deduction, now the standard deduction is large enough that most people can take the standard and come out ahead, making the tax filing more simple. Also, my tax guy charges per form, so he'll be able to help people for less money out of their pocket.Quote:
Originally Posted by CavSct1983