Tah-dah! The U.S. tax bill is the law of the land. Lots of major changes, too many to go over, but I will select just a few income tax items worthy of note to those who live and play outside the United States.That’s Mexico, for us!
Obamacare individual mandate has been repealed. Many expats spent endless hours trying to figure if they qualified for the “expat” category that excluded them from obligatory Obamacare coverage. Good news: The penalty has been eliminated. Bad news: Not yet! The elimination takes effect on December 31, 2018. For now, you either need coverage, qualify for an exemption, or pay a penalty for each month without coverage. Something tells me the current administration may not make collection of that specific penalty a priority, but it’s still on the books.
Home equity loans: After new year’s eve December 31 2017, interest on these loans will no longer be deductible. This is bad news for those who would fund purchases of Mexico real property with a stateside home equity loan. Alas, you can still have deductible interest on a second home mortgage; some RVs and even boats qualify as “second homes”.
Deduction of foreign real property taxes: More bad news – unlike before, these can no longer be deducted by individuals, unless they are paid in connection with a trade or business, or in the course of production of income (think rental residential property).