From spending time on Main Street decorated with cheerful lights, to surprising a loved one with the perfect gift, the holidays are the most wonderful time of the year.
It’s also a great time to save on a house by taking advantage of some amazing tax benefits before the year is out.
Here are some of the most common homeowner-related deductions that you can take advantage of to bring down your tax bill for the year:
- Taxpayers can deduct the interest on mortgage debt that is classified as “acquisition debt”, which means a financial obligation that you take on when purchasing a home (a mortgage loan taken out on your house is an example of acquisition debt). The IRS provides a tax advantage for people who take on a home acquisition debt-interest is deductible on your taxes if the debt is $750,000 or less (or $375,000 for married filing separately).
- Taxpayers can deduct “points” (prepaid interest) paid to their mortgage lender in the year they are paid as ‘home mortgage interest’ under IRS requirements by itemizing deductions on tax form 1040. Or, the points can be deducted over the life of the loan.
- Property taxes are deductible up to $10,000. That number is the maximum deduction for all the taxpayer’s state and local taxes, but that’s certainly money you’ll be glad to have back in your pocket!
You can also deduct expenses up to a certain amount if you plan on using your house as a home office, or receive a credit for incorporating certain energy-efficient upgrades on solar energy systems on your new house.
And, for those of you looking to sell your house before 2020, if the house has been your primary residence for at least two years and you sell it for a profit, the capital gains are tax-free up to $500,000 for married filing jointly taxpayers.
So, there are ways to both get the house you want and save-who knew?!
Come on down and see us!
If you’d love to celebrate Christmas or the New Year in a new home, now’s the time to take advantage of savings opportunities! One of our wonderful team members can help you negotiate a great deal for the perfect gift this holiday season-a new home for you and your family.
Information courtesy of ATKG