Top Main Line Real Estate Firm Sage Realty Discusses How the New Property Tax Laws Impact 2017 Tax Filing
March 23, 2018 – Philadelphia, PA – Tax season is here, and many homeowners are wondering how recent changes to the tax code will affect their tax filings – as well as their property values. Sage Realty, a respected Main Line real estate agency, wants people to know the impact of the 2017 law changes in 2018.
In fact, property values are expected to go up slightly in 2018, even considering the tax code changes in the estimates. A recent report by the National Association of Realtors® (NAR) predicts that overall, prices in the U.S., and for Pennsylvania specifically, will increase about 4.2%
According to Sage Realty’s analysis of the experts’ advice, many of the changes to the tax code are only effective going forward and will minimally impact filings of 2017 taxes. In particular:
1 – Interest on existing loans for up to $1m can still be deducted.
The 2017 tax code changes drop the ceiling for loan deductions to $750,000 going forward, but existing loans will be unaffected. Homeowners with loans up to $1 million can still deduct their interest if the loan was in place prior to 2018.
2 – Home equity loan interest will still be deductible under certain conditions.
For 2017, the old rules apply regarding deductions for home equity loans. However, some confusion has been surrounding whether home equity loans are still tax deductible under the new rules. Recently, the IRS clarified that owners will still be able to deduct the interest on a home equity loan, line of credit or second mortgage when the proceeds are used for home improvement.
3 – SALT deductions for 2017 still apply.
In the future, the State and Local Tax (SALT) deduction will be limited to $10,000, but a homeowner’s 2017 SALT taxes can still be deducted in full.
Some General Pointers for Homeowners at Tax Time
Sage Realty is always here to help clear up any confusion regarding the new tax code changes and real estate news. If you own your own home and itemize on your taxes, keep these tips in mind.
Track Home Office Expenses
If you own a home and have a certain area dedicated to home office use (and that you use as your primary location to conduct business) you may be able to deduct a percentage off of your taxes for utilities and home costs.
Keep Records of Home Improvement Expenses
Although most deductions for energy efficient upgrades to your home are no longer available, the credit for solar panel additions still exists until 2019. According to TurboTax, home improvements that also qualify as medically necessary may be deducted from income at tax time.
One way that home renovations can help with taxes is at sales time, according to Credit Karma. Home renovations costs can be added to your adjusted basis, which may decrease the amount of your calculated profit enough to alleviate capital gains tax expenses.
Keep Records of Moving Expenses
If you relocated for work reasons, you may be able to deduct part of the moving expenses, like truck rental or storage facilities.
Sage Realty cares about Main Line real estate and their clients. They want to help home owners get the best deal they can, whether that means finding the perfect house, or being able to sell their homes for a great price. This information about taxes is meant to help residents take advantage of the tax benefits of home ownership. Always consult with your tax professional for specific questions and situations.
About Sage Realty
Sage Realty was founded by Linda Walters, a long-time Philadelphia resident who decided to build a better Main Line real estate agency. Sage Realty’s team puts accountability at the forefront of their business, dedicating themselves to always advancing the best interests of their clients. When combined with their deep knowledge of the Philadelphia Main Line housing market, the result is Realtors® who can be trusted.
Sage Realty does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. For more information, contact 610-687-4000 or visit https://www.findahomeinpa.com/.