Tag Archives: Tax Bill

How the tax bill impacts homeowners, buyers and sellers via Chicago Tribune

(Getty)

We thought this article provided a good concise overview of the tax bill and changes for homeowners, buyers, and sellers. Check out the list below and see how the final version of the tax bill can affect you.

The post below was originally published via The Chicago Tribune

“Standard deduction: The new law increases the standard deduction to $12,000 for single filers and $24,000 for joint filers. For many homeowners it no longer makes sense to itemize deductions.

Mortgage interest deductions: The new law caps the limit on deductible mortgage debt at $750,000 for loans taken out after Dec. 14. (Loans made before that date can continue to deduct interest on mortgage debt up to $1 million.) Homeowners can refinance mortgage debts that existed before Dec. 14 up to $1 million and still deduct the interest as long as the new loan does not exceed the amount refinanced. The interest on a home-equity loan can be deducted as long as the proceeds are used to substantially improve the home. Mortgage interest on second homes can be deducted but is subject to the $750,000 limit.

State and local property taxes: The new law limits the property tax deduction to $10,000. The bill specifically precludes prepaying 2018 state and local taxes in 2017.

Capital gains exclusion: Home sellers can exclude up to $500,000 for joint filers or $250,000 for single filers for capital gains when selling a primary home as long as the homeowner has lived in the residence for two of the past five years. An earlier proposal would have increased that requirement to five out of the last eight years but it was struck down.

Deduction for casualty losses: The law restricts the deduction to only losses attributable to a presidentially declared disaster.

Moving expenses: The law eliminates the deduction except for members of the military.

Estate tax: The law doubles the estate tax exemption to $11.2 million.

Historic Tax Credit: The HTC has been used to fund renovations in more than 40,000 historic structures since 1981. The law continues to provide a 20 percent credit when the certified historic property is placed into service but the new law spreads the deduction over five years.

Low-Income Housing Tax Credit: The bill retains the 4 percent LIHTC, which funds about a third of all affordable housing construction.”

Montgomery Co Tax Bills Are Coming – Are You Receiving the Homestead Tax Credit?

Tax Bills are Here – Ensure You’re Receiving Tax Credits!
Homestead Property Tax Credits and New Mo Co Tax Credits for Elderly & Military Retirees

It’s July, for Montgomery County homeowners this means that tax bills will be arriving in your mailboxes shortly – the County estimates mailing bills in mid-July (bills will also be available via the County website).

Homestead Property Tax Credits

Tax Bill Example
click to enlarge

When you receive your bill you should look to see if you are receiving the Homestead Property Tax Credit (you’ll see “County Property Tax Credit”). This tax credit was established to help homeowners deal with large assessment increases on their principal residence. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage.

To prevent improper granting of this credit, a law was enacted in 2007 that requires all homeowners to submit a one-time application to establish eligibility for the credit. There are several criteria to be met, but the main conditions are that the property is your principal residence and you must have lived in it for at least six months of the year, including July 1 of the year for which the credit is applicable.

If you are not seeing a homestead property tax credit on your tax bill, you should determine the status of your Homestead eligibility by looking up your property on the Real Property Database.

Homestead Exemption Example
Click to Enlarge

Look at the bottom of the page, where it says Homestead Application Status. If it says “No Application,” then you should reapply to capture this credit on future tax bills.

For more info, check out frequently asked questions about Homestead Property Tax Credit, or contact the Homestead unit directly at 1-866-650-8783 or visit their website.

Tax Credits for Elderly & Military Retirees

Earlier this year the Montgomery County Council also enacted new legislation granting property tax credits for elderly individuals and for military retirees. Owners who are 65 or over and who has owned and lived in the dwelling for at least 40 consecutive years or those who are 65 or over and a military retiree may qualify depending on the assessed value of the home.

For 2017 taxes only, applications will be accepted until September 1, 2017. If you wish to receive a credit for your 2017 taxes, you must apply by September 1, 2017. For all other tax years, you must apply by April 1. This tax credit will not be issued on the July property tax bill; instead it will be calculated and issued on a subsequent revision of your tax bill, with the tax credit appearing as a line item deduction on the bill.

You can read more about the new tax credit and how to apply here.

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