1. tax relief for middle class
2. simplify the tax code
3. grow the American economy
4. avoid adding to national debt
While that all sounds fine and dandy, many Americans are still confused and afraid of the new tax laws, when they will take place, and most of all, how it will affect them. One of the main changes tax filers are worried about are deductions, especially for homeowners as they had the ability to itemize many home-related expenses. The new tax law will cause changes to both standard and itemized deductions that will determine how you file your taxes in the near future.
First, it is important to know the increase of the standard deduction amounts on individual (1040) tax returns:
One of the perks of homeownership is the ability to write-off or deduct the many expenses of owning a home. The standard deduction amounts listed above are a set dollar amounts the IRS allows you to deduct from your taxable income based on your filing status and age. Tax payers have the options to either a) take the standard deduction amount or b) itemize deductions (use Schedule A) such as charitable gifts, interest/taxes paid, medical expenses, etc.). It is important to know which deduction will benefit you most–especially as a homeowner!
So, should you standardize or itemize?
To start, use the chart below as a guide to understanding the current tax year’s (2017) and the changes to next tax year’s (2018) itemized deductions for home owners for the best savings potential:
‼️REMINDER: The changes to tax laws as a result of the “Tax Cuts and Jobs Act” will not take place until tax year 2018‼️
For the current tax year 2017, follow column 1 below