TAXES, TAXES, WHO’S GETTING A DEAL ON TAXES??

Senator Bettencourt says Homes Up To $500,000 In Value
Can Still Get Full Property Tax Deduction
Senate Select Committee on Property Tax Reform
Chairman will be analyzing the federal tax bill, but says
middle class taxpayers are clearly covered by the legislation
Houston – Texas Senate Select Committee on Property
Tax Reform Chairman Paul Bettencourt (R-Houston)
reacted today to the passage of the Tax Cuts and Jobs
Act of 2017 by the United States Congress. The legislation
passed by a margin of 224-201 in the House
of Representatives and a 51-48 margin in the United
States Senate. Chairman Bettencourt has been getting
calls about how big of a Texas home, in value, is still
covered under this act.
“Clearly a home worth between $400,000 to $500,000
in value, depending upon optional homestead exemptions
should allow for a property taxpayer to write off
100% of their property tax payment on their federal
income tax return,” said Chairman Bettencourt. “As we
do not have a state income tax, and depending on
whether a taxpayer uses the new doubled standard
exemption, or the itemized income tax exemption, middle
class property tax payment deductions are covered
under the tax bill.”
The bill keeps in place a $10,000 deduction for state
and local taxes which means that a Texas homeowner,
depending on their particular exemptions, will still be
able to take full advantage of the federal property tax
deduction on their taxes. The average property tax rate
in Texas is approximately $2.48 per $100 of value, and
the State of Texas gives all homesteads a $25,000 ISD
deduction, with several taxing entities offering up to a
20% option homestead exemption as well. Depending
on the homeowner’s exemption status, taxpayers will
continue to be able to fully deduct their property tax
payments from their federal tax returns up to home
values between $400,000 to $500,000 on average, by
Senator Bettencourt’s calculation. “In major metropolitan
areas the value of an average home in Texas
is approximately $248,000, so this estimated limit is
nearly twice the value of an average home in Texas,” he
added. Note that the legislation also lowered the mortgage
interest deduction on new loans up to $750,000
in value, however the million dollar exemption on older
homes remains intact.
The “Cruz Amendment”, authored by Senator Ted
Cruz (R-Texas) expands tax-exempt 529 accounts that
could previously only be used to help pay for college
expenses. The new legislation allows these accounts
to be used, for up to $10,000 a year per child, for tuition
for students in private and parochial schools for grades
K-12. In a 529 plan contributions are made using aftertax
dollars, however the growth of this money is tax
free.
“I have always said that I want all taxpayers to legally
pay their lowest possible tax or government fees,” said
Senator Bettencourt. “As Chairman of the Senate Select
Committee on Property Tax Reform, we will be studying
the Texas tax code in order to maximize deductions
and exemptions for all Texans, however it is clear that
this federal tax reform legislation covers middle class
taxpayers in Texas.”
Senator Bettencourt expects that after a thorough
review and analysis of the federal tax reform legislation
that additional interim charges could be forthcoming
from Lt. Governor Patrick before the upcoming 2019
legislative session.