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newlywedT
LIF Adolescent
Member since 9/11 792 total posts
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Can someone explain taxes please
This is my understanding of how things used to be:
If I pay 8k in real estate/property taxes I can deduct 8k from my taxes
If I also pay 8k in mortgage interest, I can also deduct 8k from my taxes.
So in total I can deduct 16k from my taxes
Now with the new tax laws, I can only deduct 10k in total combining both real estate and mortgage interest.
So in my example, instead of 16k, I can now only deduct 10k.
Is this correct?
Thanks
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Posted 9/5/18 10:42 AM  |
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Prudential Douglas Elliman Real Estate
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NYCGirl80
I love my kiddies!
Member since 5/11 10413 total posts
Name:
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Re: Can someone explain taxes please
It's more complicated than that...
To start, under the new tax laws, mortgage interest deductions are limited by the principal balance of the loan up to $750k.
But, there is a $10k cap on state + local + property taxes combined - so income and property taxes together are going to be capped.
In your example, you didn't take your income into account.
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| Posted 9/5/18 1:11 PM |
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MissJones
I need a nap!
Member since 5/05 22136 total posts
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Can someone explain taxes please
We are so screwed
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| Posted 9/5/18 8:40 PM |
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mommy2be716
LIF Adult
Member since 1/16 2921 total posts
Name:
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Re: Can someone explain taxes please
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| Posted 9/5/18 8:52 PM |
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Can someone explain taxes please
I had my accountant run my numbers and we were short THOUSANDS because of this. Nothing changed and he gave us a rough estimate based on our taxes and property tax last year... we had to take an additional few hundred in withholding to try and break even. We always go back a few thousand.... awful! And I have a mortgage and two kids! And my property taxes are less than 10k
Message edited 9/5/2018 9:05:09 PM.
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| Posted 9/5/18 9:04 PM |
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Can someone explain taxes please
My understanding is that due to the State and Local Tax being capped at $10,000 and the increase in the standard deduction (married is now $24,000), that most of us will probably not itemize our deductions anymore.
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| Posted 9/6/18 10:35 AM |
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NYCGirl80
I love my kiddies!
Member since 5/11 10413 total posts
Name:
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Re: Can someone explain taxes please
Posted by starbrightgirl8
My understanding is that due to the State and Local Tax being capped at $10,000 and the increase in the standard deduction (married is now $24,000), that most of us will probably not itemize our deductions anymore.
Correct.
The problem is many people's itemized deductions were over $24k. So if last year I itemized $30k in deductions, now I lose $6k of that.
Lose-lose for those of us with high taxes, mortgages, etc.
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| Posted 9/6/18 2:15 PM |
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ChilisWife
God Bless America
Member since 5/05 3572 total posts
Name:
A.K.
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Re: Can someone explain taxes please
Keep in mind though that there are additional child tax credits available and also lower percentage rates of taxation which will somewhat offset what you can no longer deduct. My accountant ran the numbers and said we will come out about even and that credits and lower rates are always better than deductions.
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| Posted 9/6/18 6:42 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19458 total posts
Name:
L
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Re: Can someone explain taxes please
Yes, your understanding is correct. We had over 40k in deductions that we will loose out on for the new standard deduction. It really stinks for families that own houses in high tax states.
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| Posted 9/6/18 10:13 PM |
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b2b777
LIF Adult
Member since 9/09 4474 total posts
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Re: Can someone explain taxes please
Posted by ChilisWife
Keep in mind though that there are additional child tax credits available and also lower percentage rates of taxation which will somewhat offset what you can no longer deduct. My accountant ran the numbers and said we will come out about even and that credits and lower rates are always better than deductions.
This is also what i was told. The new child tax credits are high.
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| Posted 9/10/18 1:27 PM |
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nycbuslady
LIF Adult
Member since 9/15 1066 total posts
Name:
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Re: Can someone explain taxes please
Posted by newlywedT
This is my understanding of how things used to be:
If I pay 8k in real estate/property taxes I can deduct 8k from my taxes
If I also pay 8k in mortgage interest, I can also deduct 8k from my taxes.
So in total I can deduct 16k from my taxes
Now with the new tax laws, I can only deduct 10k in total combining both real estate and mortgage interest.
So in my example, instead of 16k, I can now only deduct 10k.
Is this correct?
Thanks
You're half right. The $10K is for property taxes and local income taxes (NYS tax, NYC tax if you live there), not property taxes and mortgage interest. You can deduct your mortgage interest on top of the other $10K. But, like other people said, the standard deduction is now $24K, so you may not have more than $14K in deductions to make itemizing worth it.
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| Posted 9/11/18 12:40 PM |
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