Hello, everyone. I'm Derek Merkler, financial advisor and author here at militaryFA.com with your Tip of the Week. This week I'll be discussing the mortgage interest income tax deduction, often on the interwebs and in daily life, I see and hear people explain the incredible tax benefits of real estate. While potentially lucrative reducing your taxes through real estate ownership faces many hurdles, and I find that one of the most misunderstood concepts is the mortgage interest deduction for a primary residence. This misunderstanding is more significant with the passage of the tax cuts and jobs act in 2017.
The key piece of information left out when a realtor or friend claims Don't worry about the interest that's tax deductible anyways, is the fact that in order to deduct interest, you have to itemize your deductions. Now under the previous tax law, the mortgage interest deduction often made itemizing more favorable to taxpayers. However, with the new law, the standard deduction for married filing jointly is now $24,000. At that level, very few people will benefit from itemizing their deductions. As a result, most homeowners will not be able to take advantage of the mortgage interest deduction. So don't fall for the interest is deductible claim until you actually verify that it applies to you. If you have questions on this or any other financial topic, send me a message using the info posted below this video. Until next time.