As Americans begin to gather tax documents preparing to file taxes, many might notice things look different than they have in years past. The tax reform bill that was passed at the end of 2017 may affect deductions and refunds for many Americans. Specifically, the standardized deduction amount has changed and some of the costs associated with home ownership may or may not be tax deductible this year.
In an article published by House Logic, a detailed summary of the tax deductions as they relate to many of the common home buying and home ownership costs is provided. For example, when it comes to the closing costs associated with purchasing a home, homeowners purchasing a home for less than $750,000 will find that closing costs, mortgage interest paid and some loan origination fees are tax deductible. However, it might not be beneficial to itemize these costs if they don’t total more than the standard deduction. Further, several home purchase expenses are not tax deductible, such as attorney fees, home inspections, and title fees to name a few.
Some other categories of home expenses covered in the article are home equity loan interest, which can only be deducted when the funds are used to improve the property and the total loan amount doesn’t exceed $750,000. State and Local taxes, damage to home after a natural disaster, moving expenses, use of a home office and student loans are also covered.
Homeowners and all American filing taxes this year should pay special attention to these changes and how they affect their tax return. Read the entire article.