There are many benefits to owning a home: A home is an investment that can earn equity, is often cheaper to buy than to rent, and is your own place that you can fill with wonderful memories.
But another great benefit about owning a home is the financial benefits that you can take advantage of during tax season.
Major Tax Breaks for Homeowners
Owning a home, and eventually selling it, can offer you opportunities for deductions on your taxes, and we wanted to outline the major tax breaks for homeowners today. Are you taking advantage of these tax benefits?
Deduction for Mortgage Interest
In many cases, you can fully deduct the amount of your mortgage interest on your taxes. The IRS has a chart you can use to help determine if your mortgage interest is fully deductible.
A mortgage interest credit is available for lower income homeowners for part of the home mortgage interest that they pay.
Credit for Energy-Efficient Home Improvements
Available until the end of this year, homeowners who have installed solar hot water heaters, solar electric systems, wind turbines, or qualifying energy-efficient home improvements can take a tax credit as part of the Residential Energy Efficient Property Credit.
The credit is for 30% of the cost for these energy-efficient home improvements.
Deduction for Property Taxes
In addition to deducting your mortgage interest, you can also deduct the annual taxes you pay on your home’s value, called real estate taxes.
Deduction for Capital Gains
If you have used your home as your primary residence when you sell, you can exclude up to $250,000 in capital gains from the home sale on your taxes (or $500,000 if you are married filing jointly).
To learn what other tax benefits you may take advantage of, visit the Credits and Deductions page on the IRS website or read this MarketWatch article about other tax breaks for homeowners.
Let Us Help You Find the Perfect Home
If you have been considering buying a home in Lake of the Woods or elsewhere in the area and are ready to start your search, we can help you find the perfect home that falls within your budget and provide you with helpful real estate resources to make the journey to homeownership as smooth and enjoyable as possible.
Contact us today at 540/735-7998 and let’s talk about your goals for owning a home.
Until next time…It’s another beautiful day at the lake!
Pat Licata – Realtor