11 Things to Know About Mortgage Interest Deductions for 2018
The new tax plan has arrived. Find out what the changes mean for filers and what it will impact come tax season for homeowners.
So, Now What?
If You’re Looking for a New Home
If Your House is Expensive
If Your House Sits at an Average Price
If you Plan on Buying a Second Home
If You Plan on Renting Instead of Buying
If You Plan on Selling Your Home
Deduction Done for Most
Homeowners can refinance mortgage debts that existed on Dec. 14, 2017, up $1 million and deduct the interest, as long as the new loan doesn’t exceed the original mortgage. But after that it appears the deduction is no longer available.
Home Equity Debt Interest
The new bill repealed the deduction on home equity debt interest through Dec. 31, 2025. Interest, however, is still deductible if the home equity loan is used to substantially improve the home. There isn’t a clear definition of what constitutes a substantial improvement.
Much Ado About Nothing?
Zillow conducted research on the new tax bill and found that trying to use the mortgage interest deduction only benefits around 14 percent of homes. It used to be around 44 percent but since the standard deduction increased, it appears fewer taxpayers will try to itemize in 2018.
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A married couple can still exclude up to $500,000 profit from capital gains when they sell their home and a single person can exclude $250,000.