-Editor's Commentary-

Home Mortgage Interest Deduction.

With the new Tax Cuts and jobs act, there has been a change to the Home Mortgage Interest Deduction. This may affect many individuals who have borrowed money for their home.

Home Equity Line of Credit and known as HELOC are easy ways to obtain equity against their home and it comes with a credit card for easy use. However, with the new act, these may not be as desirable. The interested paid on a HELOC is NO LONGER deductible. The tax advantage for this has been greatly reduced.

Although the Tax Cuts and Jobs act was signed before Christmas, it affects traditional First Time Home Loans and refinance loans. It was retroactively applied to any loans that closed on or after December 15 2017. Any loan closed before December 15, 2017 was grandfathered into the old system. Any loans after, now has a limit of interest deductions on loans up to $750,000 only. If you have a $1,000,000 loan, you lose the interest on the remaining $250,000

For the matter of refinancing. This new bill affects that also. Since when you refinance the closing date is updated and there fore after December 15 2017. Therefore you will be subject to the $750,000 limit.

Medical Expense Deduction Threshold.

The old rate was 10%. Your Medical expenses must be 10% of your Adjusted Gross Income to be able to deduct any amount. With the new law, for 2017 and 2018, the rate is now 7.5% the bar is now lowered allowing potentially more individuals to deduct. This is also beneficial if medical costs are the same, but the individual lost their job or took on a job with a lower income. This helps quite a bit. If there is a medical procedure you are considering, maybe it may be best for preventative care for in the year 2018.

Business Bonus Depreciation.

According to the new law, retroactively applied back to September 27, 2017, and qualifying equipment or business purchase, you are allowed to deduct 100% of the cost immediately for the first year. The old law was only 50% for the first year. Any equipment purchased prior to September 27 2017 will be under the old law. This is to help spur spending by businesses by giving them incentive to upgrade equipment and such. Be aware that not everything can be considered equipment. The Internal Revenue Service will give guidance on the subject in time, but heavy equipment and vehicles and manufacturing machines are typically considered OK.