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Elizabeth Ann Kline                           Real Estate Agent - Realtor - Springfield 22153 - Burke 22015 - West Springfield 22152 - VA - Fairfax County Virginia

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What will be best for you with the New 2018 Tax Laws in Effect?

kevin kline

March 13, 2018

By: Kevin D. Kline

@klineonline

Taxpayers can decide each year whether to take the standard deduction or their itemized deductions when filing their personal income tax returns. Roughly, 75% of households with more than $75,000 income and most homeowners itemize their deductions.

Beginning in 2018, the standard deduction, available to all taxpayers, regardless of whether they own a home, is $24,000 for married filing jointly and $12,000 for single taxpayers.

Let's look at an example of a couple purchasing a $300,000 home with 3.5% down at 5% interest. The first year's interest would be $14,630 and property taxes are estimated at 1.5% of sales price would be $4,500.

The interest and property taxes would provide a combined total of $19,130 which is less than the $24,000 standard deduction. Unless this hypothetical couple has other itemized deductions like charitable contributions that would make the total exceed $24,000, they would benefit more from taking the standard deduction.

If the mortgage rate were at 8%, the combined total of taxes and interest would be almost $28,000 which would make itemizing the deductions more beneficial.

Tax professionals will compare available alternatives to find the one that will benefit the taxpayer most. For more information, see
www.IRS.gov and consult a tax advisor.

Elizabeth Ann Kline Real Estate Agent Blog

_____________________
Kevin Kline is a licensed Realtor® with RE/MAX Executives in
Springfield, VA.  Kevin contributes articles, blogs and content to ListWithElizabeth.com as well as third party content that has been authorized to be used by and for Elizabeth Ann Kline and ListWithElizabeth.com

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