Home ownership has many benefits, including tax deductions for those who qualify. Here are five of the top tax advantages of owning a home:
- Write off the interest you paid on a a mortgage of up to $1 Million, as long as the property is your main or secondary residence. This deduction really pays off during the first years of owning the home, when interest accounts for most of your payment, also known as home acquisition debt.
- Deduct the interest you pay on home equity loans of up to $100,000, so long as you are not subject to the alternate minimum tax or AMT (unless you use the loan for home improvements).
- Deduct your state and local property taxes from your federal income taxes where applicable.
- Deduct you home buying expenses, including loan origination fees, pro-rated interest on a new loan or prorated property taxes.
- If you sold your home in 2011, you may not have to pay federal income taxes on the earning from the sale, up to $250,000 for single filers or $500,000 for joint filers, as long as you used the home as a primary residence for at least two of the five years prior to selling. Some states Including California) offer this as well.
- Rent your home out for up to 15 days and keep the income generated - it's not taxable.
We are not tax experts, and this information is offered only as guidance. Contact us today for a referral to a tax professional to see if you qualify for these or other tax deductions.
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