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The Republican leadership in the House released its long-awaited bill to reform the nation’s tax code, the “Tax Cuts and Jobs Act.”
There is a lengthy bill that will be exposed and litigated in the next coming days. Most GOP members seem to agree after review of the many details that are tucked into the bill, that the plan was a half-way decent start.
With its release comes concern for middle-class homeowners. Limits on the mortgage interest deduction and the deductions for property taxes and state and local taxes will likely be affected. The new tax bill throws a one-two punch with tax hikes and falling home prices that homeowners simply cannot afford. GOP members say that the bill is nowhere near as good as the one under the current law.
Preliminary reviews of the bill claim that the MID cap would not affect current homeowners, but people who would become homeowners later would only be able to claim the MID to the extent the mortgage on their primary residence is $500,000 or less. The current limit is $1 million.
Other provision hurdles would likely be added to the capital gains exclusion most home sellers can take on the sale of their principal residence. Currently, the limit is $500,000 for a married couple filing jointly. The bill would eliminate the deduction for state and local income taxes. And while taxpayers would continue to have the option to deduct property taxes, the deduction would be capped at $10,000.
Other areas the legislation tackles are:
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