A booming economy, interest rates finally rising, and tax cuts creating more disposable income have consumers confident and rushing to the malls. However, recessions are inevitable — if not next year then at some point—and trimming debt and shoring up savings during the good times should be a priority.
The new tax law should cause many folks to consider paying off their mortgages but that is hardly best for everyone.
The new law increases the standard deductions to $12,000 for individuals and to $24,000 for married couples, and limits deductions for state and local taxes (SALTs) to $10,000 per return.
Medical expenses in excess of 7.5%
Medical expenses in excess of 7.5% of djusted gross income are now deductible (the old floor was 10%), casualty losses are no longer deductible unless incurred during a federally declared disaster, and interest on mortgages up to $350,000 for single taxpayers and $750,000 for married taxpayers is deductible. On loans taken out before Dec. 15, 2017, the old limits of $500,000 and $1 million apply.