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Questions about the Tax Cuts and Jobs Act? Read below for some answers!

The Tax Cuts and Jobs Act of 2017 (‘The Act’) was signed into law at the end of 2017. The Act has made some fairly dramatic changes to how many homeowners will file their taxes this year. This abbreviated summary addresses certain parts of The Act that may affect homeowners. The Act is
generally effective starting in 2018.

State and Local Tax Deductions.

In the past, an unlimited amount of state and local tax deductions were deductible on your Federal tax return. Now, on Schedule A, there is a $5,000 limit if filing single or married filing separately; $10,000 limit for married filing jointly.


Mortgage Interest Deduction.

If your home was purchased after December 14, 2017, the mortgage interest deduction is subject to new limits. Instead of deducting interest on up to $1 million of mortgage debt you will be capped on the interest on $750,000 of debt. (Interest on second/vacation homes is still deductible, but capped at $750,000 of total debt.)

Home Equity Loan Interest Deduction.

If you purchased your home at any time and took out a home equity line of credit, you may lose your deduction, unless you used the proceeds for home improvements. There is no grandfathering for a home equity line of credit (when the proceeds were not used for home improvements.)


Gain from Sale of Personal Residence.
The home sale gain exclusion remains . . . If a homeowner has owned their home and lived in their personal residence two of the last five years, the gain on the sale of the home can be excluded from paying Federal Taxes. The exclusion is a maximum of $250,000 for filing single or married filing separately; a maximum of $500,000 for married filing jointly.

The items included in this abbreviated summary are only certain aspects of The Act that may affect homeowners.

If you have any questions regarding the Act, please contact your accountant or tax attorney.

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