February Tax Update

Feb 20, 2018

Deduction of interest on a home equity loans (HELOC)

Debt secured by a first or second home and used to remodel the house has always been considered acquisition indebtedness, so the new law’s crackdown on home equity loans doesn’t apply. However, after 2017, you can no longer deduct interest on this debt used for other purposes, such as to buy a car or pay off credit card debt.

Changes to education tax breaks – 529 Plans

The 529 saving plan can now be used for Primary and Secondary Education, previously limited only to college education. After 2018, as much as $10,000, per student, per year, can be withdrawn, tax-free for tuition fees for both private and parochial elementary through high school education.

Budget deal extending tax breaks for 2017

Some highlights:

  • The write-off for private mortgage insurance
  • Above-the-line tuition deduction
  • The $2-million exclusion of forgiven debt on a primary home.

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