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Costa Mesa Inflation Effects and 2022 Income Taxes

 

Costa Mesa homeowners will not be surprised to hear that the U.S. rate of inflation will impact some of their 2022 income tax calculations—the basic income tax tables among them. The Labor Department charted the rate at an annual 6.8% increase through November, although locally, the actual prices paid for many day-to-day purchases were definitely higher than that. Calculating Costa Mesa inflation as experienced here is inexact for a number of familiar reasons—but nobody who shops for groceries or drives more than a mile or two to work hasn’t noticed it.

On Friday, Laura Saunders, the Wall Street Journal’s tax expert, sounded her take on how inflation will affect 2022 federal income tax bills—and the details touching on Costa Mesa real estate provisions led the descriptions.

Modern tax indexing—the way legislators attempt to keep taxes in line with inflation—was enacted in a major way in 1981 but didn’t extend to all provisions. The latest examples are the 2017 $750,000 cap on mortgage debt for which interest may be deducted and the 1997 exemption for profits on home sales ($250,000 for single filers, $500,000 for married couples). Those adjustments may have looked generous in 1997, but not so much today. Saunders calculates that today’s properly inflation-corrected limits would put those profit totals at $411,000 and $822,000.

Even though the current effects Costa Mesa inflation is having may be slow to be acknowledged in Washington, it doesn’t change the great tax advantages that go with owning a home. Nor does the good advice that every expert agrees upon: before making any major financial moves, consult a tax professional for its impact under the latest rules. Another good idea: for all your Costa Mesa real estate initiatives, give us a call!

We are built on a philosophy of Heritage & Hustle. The L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976.  It’s L3 mission is to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. The L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, The L3 has grown to a full staff of 25 serving over 300 clients a year. The L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has The L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa  If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to The L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact The L3 today at 714-444-4663 or email us at info@thel3.com

  

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