Market Commentary

Not Everyone is Going to Get a Tax Break

With the new Federal tax law just passed taking effect in 2018 everyone will have a reduction in the taxes taken out of their pay check for every pay period. But the changes to the law that concerns deductibility of certain costs at tax time means that there is a group of people that will actually see their taxes go up.

Generally it will be the high state income tax states and high property tax bill payers that will suffer. There is a $10,000 Federal cap of the deductibility of these two taxes from state tax you paid. For instance, if your property tax bill is $15,000 for your home you can only deduct $10,000. If your state income tax is $15,000 you can only deduct $10,000 from your paid Federal Income tax. It used to be all property tax and state income tax was deductible. There are other changes as well, but this is the big one.

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