Thinking of buying a home? Check out these 6 tax benefits that become yours, when you become a homeowner.
- Mortgage Interest: Interest paid throughout the year is deductible on your taxes for mortgages up to $1 million for a loan issued prior to Dec. 14, 2017, and up to $750,000 for any loans issued after that date.
- Home Equity Line of Credit Interest: If you borrow against the equity in your home, and the money borrowed goes toward the home itself, the interest can be deducted. The deduction is subject to the same $750,000 limit for total mortgage debt.
- State and Local Property Taxes: Homeowners can deduct up to $10,000 of their combined state and local income, sales and property taxes.
- Rental Income: Homeowners who rent out their properties are able to deduct the cost of repairs and improvements made to that rental space. The same goes for commercial or residential investment properties.
- Home Office Expenses: If you work exclusively from home, you may be able to deduct costs for the space on your itemized tax return. Deductions are limited to self-employed workers.
- Capital Gains from a Home Sale: The capital gains exclusion rule allows home sellers to keep the profit from a home sale without paying taxes on it. If you’ve lived in the property as your primary residence two years in the last five years, you can make $250,000 profit as a single person, tax-free, or $500,000 as a married couple.
Like Suze Orman famously said; “Owning a home is the keystone of wealth.” If you’re looking to start accumulating real wealth by buying a home, reach out to me at info@therespectedrealtor.com. I’d love to help you personally or connect you with someone sharp in your area.
Source: US News