Homeowners: Take Note! The New Tax Bill Could Save You Thousands -- But Only If You Act Quickly

As a homeowner in high-tax states such as California, New York or New Jersey, it's wise to keep an eye on Washington. A new federal tax bill has been proposed and while it has yet to pass into law, its proposals could have significant ramifications on your bottom line. Here is what you need to know--and why now may be the right time for action.

1. Your SALT Deduction Could Get a Major Increase

At present, homeowners are only eligible to claim deductions of state and local taxes up to $10,000 (commonly known as SALT cap), including property taxes, income tax and local taxes. Under proposed legislation this limit could be raised up to $40,000.

What it Means:
If your taxes exceed $10K (like they likely will if you own in an expensive state), additional deductions could save money at tax time.

2. Clean Energy Credits Are within Reach

This bill proposes to allow it to expire after 2025 and provide additional incentive for green home improvements, like solar panels, battery storage systems and other eco-friendly measures.

What this means for you: Are you on the fence about going solar or making energy-saving upgrades? Now is an opportune moment; waiting too long could cost thousands in tax credits.

3. Standard Deduction Gets an Increase

The standard deduction should increase modestly - possibly up to an extra $1,000 for individuals and $2,000 for married couples filing jointly.

What it means for you:
Although not game-changing, this change could provide small gains - a higher deduction means lower taxable income and potentially savings for next year.

4. Estate Tax Threshold Rising

Homeowners with substantial assets or property will find this legislation of great significance. It proposes raising the estate tax exemption from $13.6 million per person (adjusted for inflation).

What this means for you: If you are planning long-term and hoping to pass along any substantial assets such as your home to your heirs, this change could help protect more of your legacy from future estate taxes.

5. No Major Changes to Mortgage Interest or Capital Gains... Yet

At this point, the bill does not contain any direct changes to either mortgage interest deductions or capital gains exclusions when selling primary residences (250K for single filers and $500K for married couples). These areas may still be up for discussion during subsequent legislation so keep a close watch on any such potential legislation changes.

This bill could work to your advantage as a homeowner--particularly if you reside in an area with higher taxation or have been planning energy upgrades or estate planning. With greater deductions and temporary incentives up for grabs, acting early could make all the difference.

Need help understanding how this impacts your current home or future plans to sell it? Allow me to assist in breaking it all down for you - not only the market itself but the crucial moments related to safeguarding your investment!