Core Insights - The IRS has released the 2026 tax brackets and standard deductions, which, while not changing marginal tax rates, could significantly impact tax bills for high earners [1][8] - The income thresholds for the tax brackets have been adjusted upward for inflation, affecting taxable income calculations for high-income households [2][3] Tax Bracket Changes - The 2026 tax brackets show no change in marginal tax rates, but the income thresholds have increased due to inflation adjustments [2] - Taxable income is defined as gross income minus allowable deductions, which are also increasing in 2026 [3] Standard Deductions - The standard deduction for single taxpayers will rise from $15,750 in 2025 to $16,100 in 2026, while for married couples filing jointly, it will increase from $31,500 to $32,200 [3][6] Impact on High Earners - In 2026, a married couple with an adjusted gross income (AGI) of $1,000,000 will see a decrease in their tax bill from $282,407.50 in 2025 to $280,250.50 in 2026, resulting in a savings of $2,157 [6][7] - The increase in the standard deduction and adjusted tax brackets means that slightly more income will be taxed at lower rates [4][6]

Many nonprofits are facing financial challenges because of federal funding cuts and termination of contracts. Now, the government shutdown is adding to disruptions just as the most popular season for charitable giving gets underway. Sharon Eper joins us right now with more on your money and upcoming tax changes for donations.Good morning, Sharon. Good morning, Becky. You know, whether it's providing disaster relief, child care, support for seniors, or other needs in local communities, many nonprofits are co ...

Core Insights - Mortgage rates have decreased from their peak, but many borrowers still find them unfavorable. Buying mortgage points can help reduce monthly costs by paying an upfront fee for a lower interest rate [1][2] Group 1: Mortgage Points Overview - Mortgage points, also known as discount points, are used to lower mortgage rates by paying an upfront fee at closing, effectively prepaying interest on the loan [2][3] - Each point costs 1% of the loan amount and typically lowers the interest rate by approximately 0.25%. For example, on a $500,000 loan, paying $5,000 can reduce the rate from 6% to 5.75% [3] Group 2: Tax Deduction for Mortgage Points - Mortgage points are tax-deductible as they are considered prepaid mortgage interest, subject to certain limits [4][5] - The IRS allows homeowners to write off mortgage interest, including points, up to $750,000 in total mortgage debt, with a higher limit for mortgages taken out before December 16, 2017 [5][13] - Deductions for points must be spread over the loan term rather than taken as a one-time write-off. For instance, a $5,000 payment for points on a 30-year loan results in an annual deduction of about $166 [6] Group 3: Eligibility and Requirements - To qualify for the mortgage points tax deduction, the property must be a "qualified home," which includes primary residences and second homes with necessary facilities [7] - If a second home is rented out, specific annual usage thresholds must be met to qualify for the deduction [8] - Home equity loans and HELOCs can also qualify for point deductions if the funds are used to buy, build, or substantially improve the home [9] Group 4: Itemizing Deductions - Homeowners must itemize their tax returns to deduct mortgage points, as opposed to taking the standard deduction [10][12] - Other deductible expenses for homeowners include property taxes (up to $10,000 annually) and home office costs, provided the office is used specifically for business [10]

Core Points - The mortgage interest deduction allows homeowners to deduct interest on certain loans, but changes in tax laws have affected its applicability and limits [1][2][12] - The Tax Cuts and Jobs Act (TCJA) of 2017 reduced the maximum mortgage interest deduction from $1 million to $750,000 for primary residences, a change that has been made permanent by subsequent legislation [4][5] - Homeowners must itemize deductions to benefit from the mortgage interest deduction, which has become less advantageous due to an increase in the standard deduction since 2018 [12][13] Tax Deduction Limits - For the 2025 tax year, homeowners can deduct mortgage interest on loans up to $750,000 if the mortgage originated after December 15, 2017, and up to $1 million for mortgages originated before that date [3][11][23] - Married couples filing separately can deduct interest on loans up to $375,000 each for mortgages originated after December 15, 2017 [11][23] - Rental property mortgage interest is generally treated as a business expense and is not subject to the same personal-use rules [6][11] Itemization vs. Standard Deduction - The standard deduction has increased from $12,000 for single filers and $24,000 for joint filers in 2018 to $15,750 and $31,500 respectively for 2025 [13][14] - Homeowners need to have deductible expenses exceeding the standard deduction to make itemizing worthwhile, which is a significant consideration for many taxpayers [12][24] - Examples show that for lower mortgage amounts, itemizing may not be beneficial unless combined with other significant deductions [15][17] Refinancing Implications - Homeowners who refinance their mortgages may lose eligibility for the higher $1 million deduction cap, as they would then be subject to the new $750,000 limit [8][10] - Misunderstandings about how refinancing affects tax deductions can lead to filing errors, as some homeowners may incorrectly believe they still qualify for the higher cap after refinancing [10] Home Equity Loans and HELOCs - Interest on home equity lines of credit (HELOCs) and home equity loans is only deductible if the funds are used to buy, build, or substantially improve the home that secures the loan [19][20] - Documentation is required to trace the use of funds from HELOCs to determine the deductible portion of interest [19]