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Tax Benefits of Buying/Owning Your Home
JANUARY 8, 2020
ASHLEY
Home Ownership is a wonderful feeling especially when knowing there are tax breaks. If you currently own a home or thinking about purchasing a home below are tax benefits your investment provides.
1. Mortgage Interest
This deduction can be taken as longs as your mortgage is less than &750,000.
Note* The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.
2. Property Taxes
You can deduct up to $10,000. The deduction for state and local income taxes was combined with the deduction for state and local property taxes, too. You also can no longer deduct foreign property taxes as you could pre-TCJA.
3. Mortgage Points
Points are allowed to be deducted ratably over the life of the loan or in the year that they were paid. You can deduct the points in full in the year you pay them, if you meet all the following requirements:
4. Private Mortgage Insurance
You may can claim a tax deduction on your PMI payments if you purchased your home after 2007. The tax law states that you can claim the deduction if your adjusted gross income is $100,000 or less if you’re married or $50,000 if you’re single.
5. Selling your Home
Under the Home Sale Exclusion, if you’ve lived in your primary residence for two out of the five years before you sell it, you’re excluded from paying taxes on any profits you make for up to $500,000 if you’re married and up to $250,000 if you’re single.
The section 121 exclusion applies only to a “main home” and not a rental property. The main home can be a house, houseboat, mobile home, cooperative home, or condominium. To qualify as a main home it must have sleeping, kitchen, and bathroom facilities.
6. Energy-Efficient Upgrades
You can deduct through 2021 on solar energy for both electric and water heating equipment. Its time sensitive, so the longer you wait the less you’ll get back. Here’s the percentage breakdown:
&. Work from Hone Deduction
The law allows you to take a tax deduction of $5 per square foot, for up to 300 square feet of office space. The maximum deduction of $1,500, but know that there are extremely tight guidelines on expensing your home office. Check with your Accountant to be sure you qualify.
Conclusion
Home Ownership provides great benefits. Please visit the appointment tab on this website is a complete deduction list that is downloadable and list 100s of deductions that’s worth checking out. If you are seeking accounting assistance rather you are local or afar. I’m here to assist you. Click Here for Accounting Help
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