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The government has just passed the law where the taxes on…

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The government has just passed...
The government has just passed the law where the taxes on homes are going to be limited. To 10K per home. deductible is there anything I can do I am a senior and the mortgage is paid its my only deduction. against the dividends im living on . pleas make some suggestions.
Submitted: 7 months ago.Category: Finance
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12/4/2017
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Finance
Satisfied Customers: 2,614
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello, My name is ***** ***** I will be able to assist you today.

The itemized mortgage deduction may have been reduced however, the standard deduction has been increased to almost double the current amount.

Single tax payers will now receive a $12,000 standard deduction (previously the standard deduction for single tax payers was $6,300) and married filing jointly tax payers will receive a standard deduction of $24,000.

The interest portion of your mortgage payment is the only portion of the payment that is deductible, you will most likely benefit from the tax reform bill as it stands now. Do you pay over $12,000 in mortgage interest now?

Please let me know if you have any additional questions.

Thank you!

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Customer reply replied 7 months ago
I have no mortgage I am single, and how will this affect the value of my home. some friends say forming a corporation might be a way to save your money,..do i qualify for a corporation
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

If you have no mortgage then you would benefit greatly from the increase in the standard deduction.

Mortgage interest deduction is only one very small variable that affects the value of your home. Very few people pay over $12,000 in mortgage interest and therefore, this particular portion of the tax bill would have very little if any affect on the price of your home.

Given what you have shared, you would not benefit from forming a corporation. In fact, you have to pay to form a corporation and your tax returns become exponentially more difficult.

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Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

Do you have any further questions that I may assist you with regarding mortgage interest ?

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Customer reply replied 7 months ago
I have a real estate brokers licence. Will buyers have a different opinion about buying big ticket homes which is what is in my area especially if the taxes are 75k to 100k. will there be any consideration in the deduction. or will these buyers and current owners have only the 10k to deduct. when filing their taxes
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

As a financial planner I would never recommend buying a home for the interest deduction. Therefore, I don't believe any sensible person would buy or value a home solely based on the deduct ability of interest.

Also having taking all the appraisal classes, interest deduction is not used to value a home.

Interest deduction has always been subject to government risk and I would not basis a 15 or 30 year financial commitment on a regulation that is subject to change.

Additionally, clients who can afford high ticket items generally have high income and their interest deduction was capped due to their income

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Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

Hello,

Are you satisfied with the Answer you received?

If you have any follow up questions please don't hesitate to Ask.

You can rate me by using the stars, or faces on your screen and clicking submit

I look forward to working with you in the future and I hope you feel that I provided you with 5 Star services

Regards,

Chad CFP ® professional

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Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

Hello,

Are you satisfied with the Answer you received?

If you have any follow up questions please don't hesitate to Ask.

You can rate me by using the stars, or faces on your screen and clicking submit

I look forward to working with you in the future and I hope you feel that I provided you with 5 Star services

Regards,

Chad CFP ® professional

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