Are you on the fence about buying a Charlotte home for sale? Jane Peters of Los Angeles writes a good summary of the attractive benefits of homeownership with regards to federal tax breaks. Of course, you’ll always want to confirm any tax deduction with your CPA before filing your taxes.
________________________________________________________
If you are on the fence about buying a home, consider that the tax benefits of home ownership can be attractive.
What are the tax benefits of buying a home?
- Mortgage interest reduction. A homeowner can deduct the interest on a mortgage up to $1 million on a principal residence and/or second home. Depending on your income bracket this could reduce the cost of your payments by a third or more.
- Property taxes. Local and state property taxes paid can be deducted on your federal income tax return.
- Cost of home purchase. There are various costs involved when you buy a home: closing costs, loan origination fees, prorated interest on a new loan, prorated property taxes paid on closing. All these are deductible expenses.
- Home -sale exclusion This applies to homeowners who have lived in their home for any two years of a five-year period prior to the sale. You can deduct $250,000 as a single person, or $500,000 as a married couple filing jointly, from the overall profit on the sale, thereby avoiding taxes on that portion of the profit.
- Rental income. Homeowners may rent their homes for up to 14 days a year and pay no tax on that income.
These are some great reasons to consider when looking at the benefits of home ownership.
Originally posted at http://www.homejane.com/what-tax-benefits-can-i-expect-when-buying-a-los-angeles-home.html