Thinking about refinancing your mortgage in 2018? You may want to think twice. According to online tax filing and advisory solutions company Visor, refinancing this year could put taxpayers at a loss of more than $3,000.
“No longer is the decision to refinance only based on interest rates and monthly payments,” Visor said. “Any mortgage originating after Dec. 31, 2017 will be subject to the new home acquisition indebtedness rules.”
The previous tax code allowed homeowners to deduct mortgage interest on up to $1.1 million of debt, but the current law limits that to the first $750,000 worth of debt.
“Assuming a 3.5% mortgage interest rate and 30% effective tax rate that’s a tax loss of $3,100 per year,” experts at Visor concluded.
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