The benefits of owning a home are numerous, from the freedom to paint your walls, having a big yard, the garage and not hearing your neighbors come home every night at 2am. One of the biggest benefits are the many tax deductions made available to home owners.
(this post should not be taken as financial advice, always refer to a CPA or accountant for questions regarding deductions)
Tax laws can be confusing, what’s deductible, can those decorations be deducted? Hmm what about that new kitchen?
While the first step is to speak to a tax professional here is a quick and easy to understand guide on what you can deduct on your Federal taxes when buying a Home in Plattsburgh.
The IRS allows you to deduct mortgage interest you pay from your taxable income if
-You file a 1040 to itemize your deductions on schedule A
– You are deducting interest on your primary or secondary home. There are no restrictions on the type of home.
You can also deduct up to $100,000.00 in interest on a home equity line of credit. (give us a call if you would like to learn more)
You can deduct your property taxes. There are some exclusions so be sure you speak to a tax professional.
Sale of Property
The IRS allows you to exclude from your income, up to a specified amount, proceeds from the sale of your home, below is the details.
– You must have lived in your home, for at least 2 years.
-If married, you can exclude up to $500,000.00
-If single, you can exclude up to $250,000.00
-You or your spouse cannot have received, and excluded, proceeds from the sale of another home while taking advantage of the sale of your primary home. The greatest part of this is the IRS has NO lifetime limit on this type of income exclusion.
Origination fees paid to lender
The IRS will allow you to deduct origination fees you pay related to your home loan with a few restrictions.
-The Loan you closed is your primary residence
-You contributed, from your own funds, as much as the amount of points charged or more. Examples of this money include earnest money, down payment, deposit into escrow and other monies you contributed when attaining your home loan.
Check back soon as we will be adding sections soon on Miscellaneous deductions.