Homeownership Under the 2018 Tax Reform - Part 1 of 6
Wondering how the new tax reform will impact you as a homeowner?
We haven’t seen big tax reform since 1986 under President Reagan. That is, until now! There is a lot to unpack here but we’d like to focus on how this new tax reform will impact homeowners. Sadly, much confusion still swirls around the impact that these changes will have on taxpayers. This confusion stems partly from the broad changes to our individual and corporate tax systems. Also, much confusion has been added due to the complicated and highly publicized political process on display during the debate and subsequent passage of this new tax law. There was a bill passed in the House and a different bill passed in the Senate before a House-Senate conference committee reconciled these two versions producing a “final bill.” This final bill passed in both the House and the Senate with some drama causing a 2nd vote in the House. Finally, a bill was sent to President Trump, which was signed into law on December 22, 2017 giving us the Tax Cuts and Jobs Act (“TCJA”).
Several TCJA provisions impact homeowners. There are also some current tax benefits that we were in danger of losing that, fortunately, were partially or entirely saved. In this series of 6 articles, we explore the good, the bad and the saved while noting that some of the bad may not actually be as negative as first thought.
Let’s start with some great news! Effective for tax years beginning in 2018, and expiring after 12/31/2025, interest rates have been reduced with the current top rate of 39.6% cut down to 37%. See the tax rate tables below comparing rates for taxpayers Filing Single and Married Filing Jointly in 2018 as if the old law were to continue versus the new law:
Comparison - Current Law and Tax Cuts and Jobs Act (2018)
Married Filing Jointly
Don't miss part two of this six series diving into all the facts on the new tax reform!