Republican lawmakers just released the Trump tax plan, cutting corporate and middle-class taxes.
It has the potential to impact:
• Individual tax rates
• Changes for the middle class
• Increasing the standard deduction and the child tax credit
• Potential changes in the mortgage interest deduction
• The medical expense deduction
• Estate tax changes
• And more…
The Highlights of the Trump Tax Plan:
• $90,000 income pays 12% tax
• $259,999 income and below would pay a 25% tax
• Standard Deduction doubles to $12,700 for single filers and $24,000 for married couples
• Newly purchased mortgage interest deduction cap at $500,000
• $10,000 limit on property tax
• Retains the low income housing credit
• Repeals the AMT (Alternative Minimum Tax)
Here is a great article in The New York Times that highlights the proposed Trump Tax Plan changes.
This impacts real estate in a big way. First, the obvious, mortgage interest deduction reduction from $1 million to only $500,000 and the House bill restores an itemized property tax deduction for property taxes up to $10,000.
But additionally, the not so obvious, doubling the standard deduction for married couples to $24,000 would make the mortgage deduction useless for most homeowners.
A married couple would need a home-loan balance of about $608,000 before it would make sense to itemize and use the mortgage-interest deduction.
Any questions how the TRUMP TAX PLAN could affect you please do not hesitate to contact us.