November 22, 2020

Standard Deduction 2020

Standard Deduction 2020 okay so let's talk about real estate I don't want to lift you guys to kind of some concerns that might be popping up now with the new tax law changes so you hear the media saying owning.

A home buying a, home now there's no tax deduction I have a lot of people emailing me like hey Nicole did I lose my house mortgage tax reduction I can. No longer give to charity anymore because I don't get that reduction that's all entirely.

False nothing about that if you currently own two home change you still get to deduct your, mortgage interest in your deductions that didn't change here's what did change is that in 2017 a married couple got to write off either you got you got two options I'm gonna take. The standard deduction that the government gives me. Which is twelve thousand dollars in 2017 or I'm going to itemize if you guys want employers scheduled aid that I have for you that's what itemizing.

Looks like so I don't own a home typically I'm gonna take the 12 grand of the IRS gives me but if I. Own a home let's say my mortgage interest is 20 grand.

My property taxes are 10 grand that's thirty thousand and I give ten thousand to my church that's forty, thousand I'm not going to take 12 grand I'm going to take the $40,000 right off my income and then it drops me to a lower tax bracket right, that didn't change well a little bit of a change will cover that's up next but you're. Still able to take back what did change is the person that said okay Nicole I mean, I give my $12,000 standard deduction I'm thinking about buying this house that I can't afford what is my tax benefit because, maybe that tax benefit will keep me and my budget is so damn tight that extra hundred dollars that I. Get for five hundred dollars that I get from the tax benefit might help me make the decision to buy the bigger home that I can't afford and so what that looks like now. Is instead of the 12,000 compared to the 40,000 have that doubled so now I get. 24 brands as a standard deduction if I don't want to have if I don't give to my church over that amount. So 24 grand now of my schedule a my interest in my property taxes are pretty fair so. I'm about twenty thousand there let's pretend I don't get if, I don't tithe or anything like that twenty thousand to twenty four thousand I'm gonna take my standard deduction of twenty four thousand that's gonna be.

Better for me I get four thousand dollars extra over right, off and so when you're a lot of times people would call me before purchasing in the house and they'd be, look they would ask me what is my tax benefit right and if I told them whole three hundred dollars a month okay so I, could only afford a $1500 mortgage now I can afford an eighteen hundred dollar mortgage and they would do this no longer is that three hundred dollars extra because, the government's already giving it to them so this is really gonna help people who run.

It this is a great tax advantage for people who rent if you're earning a home you're probably. Above the 24 grand anyway it's just gonna affect people that you're talking to that are buying lower end homes cheaper homes having low.

Property taxes and they probably couldn't afford the mortgage.

Yet anyway and those people it's not time for them to buy that.

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