Mortgage Interest and Deductible

[Fa Tu]

I am very confused when I saw Mortgage Interest is not allowed, my loan balance is around $370K and i don't see where property taxes were allowed either and a standard deduction appeared as below, whereas in the past they were allowed:

Deductions                          You Entered          You're Allowed

Donations to charity          $2600                      $0

Mortgage interest              $15000                    $0

Standard deduction           $24000                    $24000

State and local taxes          $4200                      $0

Vehicle registration fees    $260                        $0

Secondly, when i say the Federal Tax Summary, i was surprised to see my Federal Deductions were half but my Taxable Income was almost double when there was not much of a change in my earnings, only $3500 increase from 2017 to 2018 as below:

                                                                                   2017                2018

Federal (Deductions We Found For You)       $55000             $24000

Your taxable Income                                          $43000             $80000

I am very confused, please kindly help.

Thanks! 

Tu

[dmertz]

The change in your tax situation is partially the result of the Tax Cuts and Jobs Act of 2017.  For 2018 your standard deduction is $24,000 which exceeds the potential Schedule A itemized deductions you've indicated which total only $22,060, so you get the standard deduction for 2018.  However, the main difference appears to be that you had $55,000 of itemized deductions in 2017, far more than the $22,060 of potential itemized deductions for 2018.  The difference in potential itemized deductions appears to be the main reason that you have $37,000 more taxable income for 2018.

[SteamTrain]

I don't see your property taxes on that list you presented either.

Go back to the Deductions&Credit section again....if the Mortgage company paid them, make sure they are part of your 1098 entries in the "Your Home" section in the "Mortgage Interest,..... "section.  If you paid them separately on your own,  then they go in at "Property Taxes" ... (but not in both sections)

[dmertz]

However, adding property taxes, if they are missing, would be able to increase itemized deductions to a maximum possible of $27,860 due to the $10,000 limitation on state and local taxes for 2018 (due to the TCJA of 2017).  This means that if property taxes were $5,800 or more, taxable income would only be reduced by another $3,860, so the bulk of the difference from 2017 is still some other deduction present in 2017 that is not present in 2018.