It’s tax season. Do you know the tax benefits of owning your home? There are more pros your mortgage payment than just getting closer to paying off your house. Whether you live in a single family home, condo, mobile home or town home, as long as you own it (meaning that you are not renting), you are eligible for tax breaks. Let’s discuss a few of them…
- Mortgage interest is the biggest tax break. As long as your loan does not exceed $1 million, then you will be happy to know that the large portion of your mortgage payment (that goes toward your interest) is tax deductible. If you have multiple mortgages whether it be home equity loans, vacation homes, even loans on RV’s or boats, you may be able to deduct interest on them as well (there are a few regulations to follow).
- Did you pay points to buy down your interest rate on your 1st mortgage, 2nd mortgage, a refinance, etc.? If so, you can most likely claim them on your taxes. (Again, there are a few exclusions.)
- Don’t forget the large sum of your mortgage payment that goes toward property taxes. If you are the owner of the home, you can deduct them.
- Did you sell your home? Years ago, you had to turn around and put the money you made into another home or you would pay capital gains taxes. Now, as long as your profit didn’t exceed $250,000 or $500,000 if you file jointly, you do not have to pay taxes on what you made from the sell of your home. The catch is that the home had to be your primary residence for 2 out of the last 5 years. If not, you will have to pay taxes on your profit unless you fall into a category that the IRS deems an unforeseen circumstance in which case you may get a break.
If you are new to home ownership, you may not have known all of the advantages. If you are still renting, however, these tax breaks do not currently apply to you…but they can! Give us a call today @ 720-593-2014 and let us help you get out of paying rent and into a home of your own! Next year, you will be able to save money on your taxes!