Accounting & Tax

Your job is taking off and you’re starting to get settled into your career, congratulations! Now that the puzzle pieces of life are starting to fall into place, it’s time to consider laying down some roots and buying a house. Sounds nice, doesn’t it? However, buying a house is a big milestone, whether it’s a small starter or your forever home. The purchase may affect the way that you file taxes next year. Here are some of the major changes that the 2018 tax law has affected homebuyers.

Deducting Mortgage Interest May Not Be In Your Best Interest

The new tax structure has nearly doubled the standard deduction, making it less lucrative to itemize deductions for many families. Homeowners who deducted mortgage interest from their gross income had average savings of $1950 for taxpayers in 2016.

Now, however, only those homeowners in the top 30% priced homes can save more itemizing their deductions, including interest they pay on their mortgage. Work with your tax attorney to look at your savings under the standard deduction compared to that of itemized deductions.

You May Not be Able to Deduct All the Interest You Pay

Home buyers in the most expensive markets may not receive the full benefit of tax deductions either – they may not be able to deduct the full amount of their mortgage loan interest from their gross income. Under the new regulations, insurance deductions are capped at $750,000, instead of the $1 million cap from prior years.

While this affects only a small percent of the population, it will affect the housing market, as houses for sale in the highest brackets may not attract many buyers. For residents of Hawaii, D.C., and California, this will have the greatest impact, although homebuyers with homes valued at up to $937,500 who put down a down payment of 20% or more will still get to deduct the full amount of interest on their mortgages.

Home Equity Loans are No Longer Deductible

You may have opted for a home equity loan to finance home improvements, pay for a child’s education, or to settle medical bills. These loans, although risky for some, allow you to borrow against the value in your house, and have been a lifesaver for many miles.

Now, however, you’ll no longer be able to deduct the interest on your taxes forms your home equity loan. Prior to 2018, taxpayers could deduct the interest on these loans, with a cap of $100,000.

State and Local Property Taxes May Not Be Deductible

State and local property taxes will vary by location; states with no sales tax typically see larger property tax rates. Residents of those states have enjoyed the larger itemized deductions of the property taxes in the past, but under 2018 regulations, this has changed for many homeowners as they may no longer deduct the full value of taxes paid to local governments from their federal returns. New tax reforms capped the total state and local tax (SALT) deduction at $10,000. For homeowners in wealthier areas, their state and local taxes often exceeded $10,000.

Making sense of changes in your tax obligation can be tricky. An accounting firm specializing in the changes to the U.S. tax code can help homeowners understand their options, and explain the difference in their taxes. Many homeowners became used to paying a certain amount in taxes and may have “sticker shock” with their new tax bill.

To ensure that you’re able to recoup the highest amount possible from your home loans, work with a professional who understands the real estate experts and can guide you on if you should buy a house or not – when the time is right, you’ll seek the proper guidance.

It’s very important to be able to perform basic mathematics by the time you leave school. You’ll more than likely finish your compulsory schooling with a barrage of algebra thrown at you. More often than not, you’ll have asked the same question over and over again: “What’s the point?”. Well, we’re here to tell you, there isn’t much point unless you’re going into teaching Maths or physics. So let’s way up the odds, the majority of all the pupils leaving school in Year 11 will never use algebra again.

However, one part of mathematics that everyone will use, sometimes on a daily basis, is mental arithmetic. This is one part of maths that is actually useful for us, and one that seems to be neglected in high school.

We take part in mental arithmetic in Year 6 and in Year 9 after that, it’s all funny numbers and letters! None of this is remotely useful!

The part of the brain that assists with calculation and problem solving should be stimulated from an early age. It’s important to start to teach mental maths at the age of 5, this will improve their ability to use four arithmetic rules in high speed: addition, multiplication, division and subtraction.

There are plenty of factors that make this an extremely important part of learning:

– It will greatly improve concentration levels

– It will enhance your listening skills

– It will improve self-confidence and endurance

– Problem solving skills are improved.

– Comprehension and calculation breakdowns are improved

– It improves short-term memory

– Logical thinking will also be enhanced

One of the most important factors to consider in this process is the manipulation and breakdown of numbers in the head. You have to be able to sort out the numbers in your head, incorporating estimation, measurement and place value. This concept will make it easier for students to remember the maths facts a  lot easier.

There are plenty of maths tutoring websites for you to learn more about manipulating numbers in your head. The best manner to teach mental maths is to string together random numbers and ask students to find the solution. You have to start simple and allow each pupil to draw their own conclusion and their own methods. With  more and more practice, they will develop and individual strategy that will gain speed over time.

The great thing about mental maths, is that there’s no right or wrong way to get to the answer. It isn’t like a written test where the workings out are marked, it’s all up there in your head. Everybody derives a conclusion differently, it’s upto you as the teacher to guide your students towards the best route for them.

It’s important to try and engage in mental maths every day of our lives. This applies to adults too, if you’re out for food, don’t get your phone out to add up how much your meal costs. Stimulate your brain and work it out. We are our calculator and with the right practice we can calculate almost anything!