Columbus home buyersThe Tax Reform and Jobs Act changes how income taxes are calculated for tax year 2018. Tax rates have been reduced for most income brackets, personal exemptions are kaput, and some popular deductions have been altered. Here are key points Columbus home buyers should know!

First, very few people buy a home purely for the tax breaks. Home buying is motivated by pragmatic and emotional considerations, such as control of your housing costs, or the desire for greater privacy, or the need to accommodate a growing family. Home ownership is among the major milestones of life, and nothing in tax policy will change that.

Yet home ownership has been synonymous with income tax breaks for decades. Understanding how the new tax law could affect you is an essential part of any financial planning, including home buying. We will share some points for example purposes, but we cannot provide tax advice. Please discuss your situation with a tax professional!

Here are some changes that could affect Columbus home buyers who file an itemized return, starting in tax year 2018:

1. The mortgage interest deduction for primary residences and vacation homes has a new cap. Mortgage loans originated after December 15, 2017, have an interest deduction limit of $750,000. Mortgages originated prior to this date can still claim up to $1 million in interest deductions.

2. Itemized deductions for real estate property taxes, state and local income taxes and sales taxes, cannot exceed a combined total of $10,000.

3. Job-related moving expenses are no longer tax deductible, except for members of the Armed Forces who relocate by military order.

4. The interest paid on a home equity loan is no longer deductible, unless the proceeds are used for substantial home improvement or repair.

To file an itemized tax return and claim deductions, your expenses must exceed the standard deduction that is already provided. Under the new tax law, the standard deductions rise to $12,000 for single taxpayers, and $24,000 for married taxpayers filing jointly. This could make itemizing less necessary for some home buyers. However, the ability to take advantage of certain tax deductions is still there, if your expenses make it worthwhile.

This is only a brief overview of a small portion of the new tax law. Everyone’s tax situation is unique, and only a professional tax preparer can give you accurate guidance on these topics. New guidelines for tax year 2018 are still being developed by the IRS; watch IRS.gov for updates!

Just as a professional tax preparer is an important resource for income tax guidance, an Exclusive Buyer Broker is an indispensable ally in the home buying process!

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA-M, CNE, CSP, PSA, e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax