As a homeowner you know there have to be some additional end-of-the-year tax benefits. We want you to be educated and maximize your tax return, or help you to owe less, so here are a few options on how you can use mortgage and tax payments to get a greater 2018 benefit.
The Basics and Details
Using mortgage and property tax payments to get a greater 2018 tax deduction:
2018 Standard deduction $12,000 single and $24,000 Married filing jointly.
Last week we mentioned that you can contribute to charity and get a tax deduction if you are already above the standard deduction threshold.
Another way to get more of a deduction is to prepay various expenses.
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Two housing ones:
Make the January Mortgage payment in December so the deductible interest expense will be included on your 2018 tax return. Again, this assumes you already cleared the standard deduction and you are willing to forgo getting the January interest deducted in 2019.
This is definitely a great strategy if one assumes that he has already passed the standard deduction threshold in 2018 and will not be in 2019 or that his 2019 tax rate will be lower than in 2018.
Another expense to consider accelerating is the Property tax deduction:
If you have already passed the standard deduction from other itemized deductions and you have not yet paid over $10,000 of State Income tax or property tax (the maximum you can deduct of these two taxes combined is $10,000), then you can pay the 2019 first quarter assessed property tax in December 2018.
This is another strategy to bundle as well as accelerate itemized deductions to lower your 2018 taxes.
Come back next week for more of our End Of The Year Tax Series.