Homeownership After the Tax Cuts and Jobs Act

Making the Most of the Mortgage Interest Deduction

Dana Hart, PhD, CPA, and Robert Slater, PhD, CPA

In the aftermath of the Tax Cuts and Jobs Act of 2017 (TCJA), home buyers may be disappointed by the diminishment of tax benefits that once subsidized homeownership. With a substantial increase in the standard deduction and sweeping changes to many individual income tax provisions, millions of taxpayers will no longer need to file an itemized return in 2018, meaning that millions of taxpayers will no longer benefit from the tax deductions previously taken by homeowners. According to the Joint Committee on Taxation, the number of taxpayers filing an itemized return in the 2018 tax season is expected to decline by 61.3% (“Tables Related to the Federal Tax System as in Effect 2017 Through 2026,” Apr. 24, 2018, http://bit.ly/2rZZuq5). In this current climate, it is more important than ever for tax professionals to be knowledgeable about potential tax savings.