Before 2018, paying alimony was deductible from your taxes, while receiving it was taxed at 15%.
But the new 2018 tax law switches that around: according to its provision, as of 2019 you can’t deduct the alimony you pay from your taxes, but you don’t pay taxes on the alimony you receive.
The new rule means the government will end up with much more alimony money switching hands than it does before – and significantly changes the economics of divorce. Whether that means a rush to the courthouse will have to be seen. But if it does … talk about unintended consequences!
If your financial life is complicated, you need someone on your side. Contact a Tax Ninja for a consultation.
A new report from Citigroup estimates that homeowners in states with hot real estate markets like California, New York, and Connecticut will see their tax bills go up by an average of $3,000.
That’s because homeowners will no longer be able to deduct the full amount of state taxes they pay on their homes from their federal taxes, so that while buying a home might not be any more expensive, owning it will be. There are also new caps on mortgage deductions.
The tax plan raises the basic deduction for every individual taxpayer by over $5,000, but that amount could be dwarfed by the property tax deductions people in expensive states are now losing.
The more invested you are in your home, the more you could get hit.
If you own real estate, you need to optimize your taxes. You need a Tax Ninja now more than ever.
Contact us for a consultation.
Now that homeowners can’t deduct their full state property taxes from their federal income taxes, the cost of owning and maintaining a home could rise significantly. A new report from NPR suggests that those costs will ultimately be paid by tenants, with landlords raising rents across the country – especially at the lower end of the rental market.
That could get even worse, NPR suggests, if the new lower tax rates also make the Low Income Housing Tax Credits that developers get if they construct affordable homes less attractive.
More expenses for landlords combined with fewer new affordable units could create a significant crunch on renters.
It’s more important than ever to take advantage of the new tax bill and lock in your savings. Contact Tax Ninja for a consultation.