Reminder that deduction for real estate taxes are now limited

By
Industry Observer with Thomas G Rex CPA AZ CPA Certificate #1217

The Tax Cuts and Jobs Act (TCJA) limited the amount of state and local taxes individuals can deduct in a calendar year to $10,000, or $5,000 if married filing separately. This applies to income, real estate, and sales taxes.  

There may be some tax planning possibilities for timing when these taxes are paid, but these are tricky and should be done after careful research or by talking with your tax advisor.

The standard deduction is now:

  •          $24,000 for married filing jointly and qualified widow(er),
  •          $18,000 for heads of household, and
  •          $12,000 for single filers and married filing separately.

However, personal exemptions have been eliminated.

So for some taxpayers, the standard deduction may now be better than itemizing, especially since the miscellaneous itemized deductions subject to 2% of your adjusted gross income have been eliminated. But you need to crunch the numbers.

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Topic:
Lending / Financial
Location:
Arizona Pima County
Tags:
tax reform
itemized deductions
standard deduction
state and local taxes

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Rainer
462,080
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Tom,

I do not envy you. This seems to create a lot more work, although you probably have some cool software for comparing scenarios.

Jan 08, 2019 10:56 AM #1
Rainmaker
4,694,683
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning Tom.  Thanks for the information about the recent tax changes.

 

Jan 12, 2019 05:15 AM #2
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Rainmaker
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Tom Rex, CPA, USTCP

Tax Problem Resolution
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