The mortgage interest deductibility limit was also lowered from the interest on $1 million in debt to the interest on $750,000 in debt. The new tax law also caps the deductiblility of property taxes combined with either state income or sales tax at $10,000. Many homeowners will not pay enough mortgage interest, property taxes & local income tax to justify itemizing the expenses - so the above interest savings may not lead to income tax savings losses for many Americans. Before the standard deduction was increased 70% of Americans did not itemize their taxes. The 2018 tax bill increased the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly. Standard vs Itemized Income Tax Deductions While this will result in a loss of $4,948.12 in tax benefits, you will still save a total of $14,844.35 with the bi-weekly plan. As a result, you will pay only $121,893.23 in interest with the bi-weekly schedule rather than $141,685.69 with the standard payment plan. If you took out a $250000.00 loan with an interest rate of 3.250% and your federal tax rate is 25.000%, you can expect to pay $1,088.02 per month, while a bi-weekly payment plan will call for a payment of $544.01 every other week. ![]() ![]() With the standard plan, it would take you 30 years to repay the loan while a biweekly plan will take 26 years and 4 months. When you set up your mortgage payment repayment plan, you can choose between a standard repayment plan or a bi-weekly repayment plan. Your Results in Plain English ( Switch to Financial Analysis)
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