Your search results

It is tax time again

Posted by kim carpenter on February 7, 2011
| 0

For those of you who purchased your first home in 2010, this is your first opportunity to take advantage of the tax benefits of home ownership!

While renting offers zero tax breaks, buying a home offers several tax benefits that can make homeownership more affordable. to understand the all of the tax benefits of home ownership.

The following is a few of the tax benefits to home ownership:

? Home mortgage interest deduction: Home owners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.
? Property tax deduction: Home owners can deduct from their federal income taxes the state and local property taxes that you pay on the home.
? Deductible home buying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.
? $250,000/$500,000 home-sale exclusion: Home owners who have lived in their home for two of the prior five years prior to its sale do not have to pay income tax on the majority of their profit — $250,000 for single home owners and $500,000 for married homeowners who file jointly.

Don’t forget those of you who took advantage of the First Time Homebuyer’s credit in 2008 are required to pay that back.

I always recommend consulting a tax professional to be certain that you maximize your tax benefits.

Leave a Reply

Your email address will not be published.