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Like most homeowners over the past couple of years, you may have discovered that you can no longer write off your property taxes or claim the mortgage interest deduction.

That doesn’t necessarily mean your taxes went up. The change is because the standard deduction nearly doubled starting in 2018, negating many homeowners’ need to itemize their home-related expenses. Here’s a roundup of the rules affecting homeowners.

Standard Deduction

The standard deduction is the amount everyone gets to claim whether they have actual deductions or not. It skyrocketed after the 2017 tax law changes, and has gone up again, incrementally, for tax year 2022. It’s now $25,900 for married, joint-filing couples (up from $24,000 in tax year 2018). It’s $19,400 for heads of household (up from $18,000). And $12,950 for singles (up from $12,000).

Many more people now find the standard deduction is higher than their itemizable write-offs. In fact, the proportion of homeowners who now find it advantageous to itemize their deductions (including mortgage interest and https://cashadvancecompass.com/loans/wedding-loans/ property taxes) under the new rules has fallen from about one in three to around one in 10.

“This doesn’t necessarily mean that those who no longer itemize will pay more taxes,” says Evan Liddiard, a CPA and director of federal tax policy for the National Association of REALTORS in Washington, D.C. “It just means that they’ll no longer get a tax incentive for buying or owning a home.”

So are you still itemizing, or are you now in standard deduction land? If the answer is standard deduction, you’ll find that your tax forms are slightly simpler when you don’t itemize, says Liddiard. But the trade-off is that our tax system no longer gives most homeowners a tax advantage over those who rent. Find instructions for IRS Form 1040 here.

Personal Exemption

The increase in the standard deduction for homeowners and nonhomeowners also has another downside: There’s no longer a personal exemption. You can no longer exempt from your income $4,150 for each member of your household. And that might temper the benefit of a higher standard deduction, depending on your particular situation.

For example, single filers and married couples without children might still come out ahead. This is because their increase in the standard deduction is more than the amount lost by the personal exemption repeal.

However, families with two or more dependent children over age 16 are likely to come out losers from the loss of the personal exemption. This is because the loss of the personal exemption is greater than the extra amount included in the increased standard deduction.

Families with children under age 17 received an additional $1,000 in child credits, which, depending on their tax bracket, is more valuable than the loss of the personal exemption.

Mortgage Interest Deduction

The tax law caps the mortgage interest you can write off at loan amounts of no more than $750,000. However, if your loan was in place by , the loan is grandfathered, and the old $1 million maximum amount still applies. Since most people don’t have a mortgage larger than $750,000, they won’t be affected by the limit.

But if you live in a pricey place (like San Francisco, where the median housing price is well over a million bucks), or you just have a seriously expensive house, federal tax laws may mean you’re not going to be able to write off interest paid on debt over the $750,000 cap.

State and Local Tax Deduction

The state and local taxes (SALT in CPA lingo) you pay – including income (or sales in states without a state income tax), and property taxes – are itemizable write-offs. But, the tax rules say you can’t deduct more than $10,000 for all your state and local taxes combined, whether you’re single or married. (It’s $5,000 per person if you’re married but filing separately.)