Without knowing the details of the plan until it becomes public, it is hard to know if the new simple rates structure under discussion would equalize the lost of these deductions for the average person.
Only time will tell.
|WHAT’S IN IT FOR ME?|
Topic Summary: What Homeowners May Be Faced With Loosing or Having Reduced
Since 1913, Homeowners have been given preferential treatment. For 100 years, interest on the mortgage has been a favored tax break. It is also one of the costliest tax breaks. It is under fire to be eliminated over time or at least reduced in value.
Here is a quick list of some popular tax breaks we homeowners enjoy.
1. Mortgage Interest
Interest that you pay on your mortgage is tax deductible, within certain limits. Married taxpayers can deduct all your interest payments on up to $1 million in mortgage debt secured by a first or second home. The average homeowner using this deduction reduces their taxable income by about $12,000. Americans save around $80 million every year by deducting mortgage interest on their tax returns.
2. Capital Gains Exclusion
Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years.
4. Property Taxes. Homeowners at certain levels of income can deduct from their taxable income, local property taxes paid on their home.
5. Energy Efficiency Upgrades/Repairs Deduction
Homeowners can deduct the cost of the building materials used for energy efficiency upgrades to their home. This is actually a tax credit, one which is applied as a direct reduction of how much tax you owe, not just a reduction in your taxable income.
6. Loan Forgiveness Deduction: For homeowners who had
Source: Al Clark's Home Action