• ron7732

Buy or rent and our new Standard Deduction tax law

Dear Clients and Friends,

Our new tax law doubles the standard deduction to $12,000 for an individual filer and to $24,000 for a married couple. (The IRS standard deduction is the portion of income that is not subject to tax, thereby lowering your overall tax burden. Taxpayers may choose to take the standard deduction or itemize deductions instead.) 

Doubling the standard deduction means fewer people will have the incentive to itemize. The nonpartisan Tax Policy Center estimates that the number of itemizers will fall from about 49 million to 10 million.

For example, if you’re married and filing jointly and paid $20,000 in mortgage interest and property taxes, you would have itemized those deductions in the past, getting a nice little perk for homeownership. But beginning in 2018, you will take the standard deduction instead. 

While the shift doesn’t necessarily change a person’s overall tax burden, it does remove the tax write-off that comes with homeownership. That could change the rent vs. own decision for first-time buyers.

According to Zillow, about 44 percent of homeowners were better off itemizing prior to the tax changes. That number has now dropped to just 14.4 percent. That means a big incentive to buy is now gone for about a third of potential home buyers.

If you or a loved one have a Family Law, Real Estate or Tax Collection Defense matter that we might be able to help with, we continue to invite your use of our free initial phone evaluations of your current challenge.

Best,

Ron

0 views0 comments

Recent Posts

See All

‘Renter’s Choice’ laws gaining steam

Dear Clients and Friends, In October, the Atlanta City Council unanimously approved legislation that would allow tenants to pay their security deposit in installments, or purchase security deposit ins

Foreclosures hit a low, at least for the time being

Dear Clients and Friends, The number of foreclosure filings nationwide dipped to a record low as of the mid-point of 2020, according to ATTOM Data Solutions’ Midyear 2020 U.S. Foreclosure Market Repor

Modifying your support agreement during a pandemic

Dear Clients and Friends, The coronavirus pandemic has wreaked havoc on millions of Americans’ financial situations. Layoffs, reduced hours, furloughs and business closings have changed people’s econo