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Mortgage, Personal Finance, Retirement, Taxes

Trumps Proposed Tax Plan

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…
trump tax plan
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.

Personal Finance, Taxes

When Your Child Should File a Tax Return

When Your Child Should File a Tax Return

You might assume that a young person doesn’t have to file a tax return until he or she has reached adulthood, moved out of the family home, and is generally self-supporting. Yet IRS rules regarding who must file are based on the amount and source of income rather than age.

Here’s a closer look at the filing requirements affecting dependents (meaning someone else pays more than half of their support, including college tuition, room, and board) such as teens and college students, as well as their parents.

Generally, a tax return must be filed if an individual has earned income above $6,200 (in 2014), unearned income from interest or dividends above $1,000, or a combination of earned and unearned income totaling more than $1,000 with at least $350 unearned. The filing threshold for net self-employment income is $400.

when-your-child-should-file-a-tax-return

Unearned interest and dividend income (up to a maximum of $10,000) received by a dependent may be reported on a parent’s tax return. Otherwise, a separate return must be filed by the dependent or by a parent on the child’s behalf.

Many young workers who earn less than the filing threshold will want to file if they had income tax withheld from pay and are eligible for a refund.

Source: Internal Revenue Service, 2013
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