Standard or Itemized in Highlands Ranch

In Highlands Ranch I know I am concerned about the income tax structure for next year and how it will affect/effect my with holding and FICA. And I am sure the folks in Denver and our suburbs have the same concern. Here is a short synopsis that may help you understand how it might affect you…

Taxpayers can decide each year whether to take the standard deduction or their itemized deductions when filing their personal income tax returns. Roughly, 75% of households with more than $75,000 income and most homeowners itemize their deductions.Highlands Ranch,Denver

Beginning in 2018, the standard deduction, available to all taxpayers, regardless of whether they own a home, is $24,000 for married filing jointly and $12,000 for single taxpayers.

Let’s look at an example of a couple purchasing a $300,000 home with 3.5% down at 5% interest. The first year’s interest would be $14,630 and property taxes are estimated at 1.5% of sales price would be $4,500.

The interest and property taxes would provide a combined total of $19,130 which is less than the $24,000 standard deduction. Unless this hypothetical couple has other itemized deductions like charitable contributions that would make the total exceed $24,000, they would benefit more from taking the standard deduction.

If the mortgage rate were at 8%, the combined total of taxes and interest would be almost $28,000 which would make itemizing the deductions more beneficial.

Tax professionals will compare available alternatives to find the one that will benefit the taxpayer most. For more information, see www.IRS.gov and consult a tax advisor.

Having lived in Highlands Ranch since 1989 does not make me a tax expert…but Contact me with more questions.  

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About Pete Doty

As a Realtor® Pete has been working in the Denver residential market since he first started in 1985, and focusing primarily in the south end of town. He finds the client the home they want, and then help them sell it when they want to move. Marketing is really where his heart is, and making sure his clients’ interests are watched over in Littleton, Highlands Ranch, Parker, Castle Rock, Centennial, Englewood, Morrison or Denver. His web site www.DenverRelocation.com ranks high in search rankings and generates numerous relocating buyers each year. Talk to Pete for a unique perspective on today's real estate market in Denver.
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