The Tax Benefits of Home Ownership
Home ownership is a wonderful thing. It comes with benefits that you won't find anywhere else, including building equity and affording your family the ability to settle down in one particular area. On top of that, there are numerous home ownership benefits to be had when tax season rolls around each year.
Here are some great ways in which owning a home can make your life easier at tax time.
Mortgage Interest Deductions
Mortgages and buying a home are long-time commitments, with a typical term of 30 years. Fortunately, any interest you pay on your mortgage may be tax deductible, so long as it does not exceed $1 million in one year. If you're married and filing your taxes separately, that threshold drops to $500,000 respectively. The amount of interest you can deduct is somewhat dependent on your yearly income as well. Â Such deductions can phase out at higher income levels, so be sure to check with your CPA to determine what amount, if any, is deductible.
Property Taxes as Deductions
Claiming your property taxes is a fantastic way to reduce your yearly taxable income. If your mortgage is set up with an escrow account, you can get an idea for how much to deduct by looking at how much you've paid in taxes on the escrow statement.
Other Notable Deductions
Deducting your mortgage interest and property tax are the largest tax-related home ownership benefits, but there are other deductions as well. If you've taken out a home equity loan or line of credit, you may be able to deduct that interest up to $100,000. Home upgrades that reduce energy use or are related to medical care can often be deducted as well.
Buying a home can be intimidating, but taking advantage of all of the benefits that home ownership has to offer can make the process much less stressful. We know that every situation is different, and we strive to create mortgage solutions that suit your specific needs. Contact us today at 407-931-3800 with any questions.
*Please consult with your accountant to find out whether these benefits of home ownership pertain to your specific situation.
