In a new series, we'll be speaking with different service providers who act as advisors when it comes to real estate matters. The first in this series is with Robert Demmett, a Partner at WithumSmith + Brown, PC, one of the largest public accounting firms.
Here, Bob provides more color on changes contained in the “Tax Cuts and Jobs Act,” and the resulting costs of home ownership so that prospective purchasers and sellers can become more familiar with these tax implications.
One of the first advisors called.
As a CPA, I am usually one of the first advisors called by clients looking to purchase a house or making an upgrade. The conversation usually starts with the question "how much can I afford?" but quickly gets rephrased as "how much can I afford on a monthly basis?"
Unlike other large recurring expenditures, determining the monthly amount that can be spent is complicated, due to the income tax implications. After all, most of the largest monthly expenses related to your home are tax deductible and may be partially offset by reducing your monthly income tax withholding; resulting in a larger net paycheck.
How will taxes affect me?
Since the “Tax Cuts and Jobs Act” passed in December 2017, the computation of the monthly“after-tax” cost of owning a home has drastically changed, resulting in many indifivuals revisiting what they can afford on a monthly basis. We explored these additional monthly costs, through an illustration of typical residences priced at $1 million, $2 million and $3 million.
About Robert E. Demmett:
Robert E. Demmett is a Partner at WithumSmith + Brown and has over 30 years of professional accounting experience. He is a certified public accountant in New York.
Bob specializes in tax and financial planning for high-net-worth individuals as well as handling tax and compliance issues for partnerships, corporations and other entities.
For any questions relating to this article or other tax matters, you can contact Robert directly.
DISCLAIMER: VOR, Inc and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.