2017 Tax Deduction Checklist & Resources

2017 Tax Deduction Checklist & Resources

Tax Deductions for Home Owners

Tax Reform has caused a lot of confusion for Home Owners and also for those who are looking to Buy a Home or Sell their home. Most are confused and want to understand the benefits & deductions  they have this year vs next year filings. I am not a tax advisor nor do I offer any tax advise here. I have compiled information from the links below to provide you with a list of resources that I find useful for our clients. Each individual person is a different and unique case, and only your CPA/Tax Advisor can provide you with the best advise for your specific case.

So let me outline some of the deductions that you can take this year and if you would like to know what has changed, please download our 2018 Tax Reform Report we created. ( Also remember that some of these items still need to be defined for 2019 Filings)

Great Resource and checklist – we summarized below – please see the link here to see all the details and also other references. We are not accountants, tax advisors and this information has been provided for informational purposes. Always consult your accountant and tax advisor

Mortgage interest

2017 – You can deduct the interest from up to $1 million in mortgage debt or $500,000 if you file single. You will need to itemize your deductions, but it’s worth the hassle, especially for new homeowners.

2018 – Only the interest on the first $750,000 of mortgage debt will be deductible next year

Mortgage points – These are interest that you prepay. Each point is 1% of the loan amount. If you purchased a home in 2017 and paid “POINTS” – these can be deducted but they must be “True” or “DISCOUNT POINTS” and NOT Origination Points! Example on a $500K loan if you paid 2 points – you can deduct $10K

Changes for 2018: None, except that deductible interest on new loans will be subject to the new $750,000 debt limit.

Private mortgage insurance – This is insurance you pay if  you did not put down 20% down payment. PMI is generally between .3%-1.5% of the loan amount annually. On a $500K loan , you’d deduct between $1,500 – $7,500.

2017 – It’s tax-deductible as long as your adjusted gross income is less than $100,000. (For each $1,000 you make after that, you can deduct 10% less of your PMI, up to $109,000.)

Changes for 2018: So far, Congress has renewed this deduction for only the 2017 tax year, says Hughes. Unless a new bill is passed sometime this year that will keep this deduction afloat, PMI won’t be deductible when you file next year.

Home equity debt interest

Homeowners often take out a home equity loan or home equity line of credit in order to tap into some quick cash—for college, weddings, home improvements, or otherwise—using their home as collateral. And up until 2017, homeowners could deduct the interest on home equity debts up to $100,000 for married joint filers and $50,000 for individuals. So if you pulled out a 15-year loan for $50,000 at 7% interest to pay for a child’s college tuition, that would be a deduction amounting to $3,438 in your first year.

Changes for 2018: “Home equity debt interest deductions have been eliminated,” says Bronnenkant—that is, unless you spend the money on one thing only: home improvements.

So if you are looking to improve your home with a new addition, this deduction will stand but if you take out a loan to pay for college or other expenses,  IRS will no longer pitch in.

And unlike with mortgage interest deductions, the new rules on home equity debt apply to all loans regardless of when they were taken. You’d better deduct that interest while you can!

Property taxes

2017- For the last time this year, your property taxes are fully tax-deductible.

“You can take deductions for all the properties you own, plus add your state income tax,” says Steven Weil, president of RMS Accounting, in Fort Lauderdale, FL. Property tax rates vary nationally from 0.28% to 2.38%, so for that $300,000 house you bought, you’d be deducting between $840 (in Hawaii) and $7,140 (in New Jersey).

Changes for 2018: Next year, there’s a $10,000 cap on the combined amount of your property taxes, state and local income taxes, and (for states without income tax) deductible sales tax.

Energy-efficient upgrades

Did you add solar panels or solar-powered water heaters last year? That means you can help yourself to a tax credit.

According to Bishop L. Toups, a taxation attorney in Venice, FL, qualifying solar electric panels and solar water heaters are good for a credit of 30% of the cost of the equipment and installation. For a $30,000 green investment, that’s a cool $9,000 back!

To qualify, the solar panels have to generate at least half of the energy used by the home, they have to be installed in your primary residence, and they can’t be used to heat a pool or hot tub (sorry to kill your solar hot tub dreams).

Changes for 2018: The credit will vary based on when it’s installed: It will remain 30% of the cost for equipment installed between now until the end of 2019, 26% until the end of 2020, and 22% until the end of 2021.

Home office deduction

W-2 employees, this is your last year to grab this one, says Joshua Hanover, a senior manager at Marks Paneth.

Using the simplified home office deduction, you can take $5 for every square foot of office, up to a maximum of 300 square feet. For a 200-square-foot home office, you’re looking at a nice $1,000 deduction. Just don’t try any funny stuff—it has to be a dedicated home office, used only for work. Here’s more on the home office tax deduction.

Changes for 2018: Next year, the home office tax deduction disappears for all W-2 employees who have an office elsewhere they could use if they wanted to. The only people who can continue this deduction are those who truly run their own business from home.

The full article here:


Your 2018 Tax Document Checklist

Tax Deduction Checklists for all sorts of Professionals can be found here: http://www.cpa-services.com/tax.shtml

Tax Return Preparation and Tax Deduction Checklist

Turbo Tax Preparation Check List: https://digitalasset.intuit.com/DOCUMENT/A44724mxI/TurboTax_TaxPrepChecklist.pdf

Turbo Tax Preparation Overview: https://turbotax.intuit.com/tax-tips/tax-planning-and-checklists/tax-preparation-checklist/L7LHiDqGJ

HR Tax Preparation Overview: https://www.hrblock.com/tax-prep-checklist/what-do-i-need-to-file-taxes/

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