Owning a home has long been a great way to save on your taxes. This is true.
Take a look at the photo that owning a home can still give you a break on your taxes.
deductions for mortgage interest and property taxes
This is the big one. You can usually deduct mortgage interest on loans up to $ 1 million that you used to buy or build your house (up to $ 500,000 if you are married and filing separately).
You can also deduct home equity loan interest up to $ 100,000 (up to $ 50,000 if married and filing separately).
you can deduct the property taxes you pay on your home or other property you own.
Deductions for points
When you purchase or refinance your home, you can pay "points", a percentage of the loan as an advance fee. You can usually get a lower interest rate on your loan if you pay more points.
If you pay points when you buy the house, you generally deduct points in the year you pay them. If you pay when you refinance, you deduct the course of the loan.
mortgage interest credit
If you receive a mortgage credit certificate for qualified (MCC) of a state or local government unit or agency under a certificate program qualified credit, mortgage interest credit can directly reduce your tax debt.
You must itemize deductions to qualify for this tax relief.
home office deduction
If you work from home as an employee, or if you're self-employed, you may be able to take a home office deduction. This includes a deduction for depreciation on the part of your home that you use for business.
energy credits
This credit was extended until 2016. You can still get a tax credit for energy efficiency if you buy qualifying energy efficient products such as windows and doors, biomass stoves, insulation before the end of the year.
The credit is 10% of the cost of your improvements of qualified energy installed during 2013, as well as all costs of residential energy property. Your total credit for all years after 05 can not be more than $ 500.
Gain Tax-free when you sell
In most cases, when you sell your home at a gain, you have to pay tax on any gain. You can have up to $ 250,000 of gain before paying any tax on capital gains ($ 500,000 if married filing jointly).
Generally, you must have lived in the house and detained for at least two of the last five years to avoid paying capital gains.
If you lived in the home for less than two years but had to move due to a job change, health reasons, or other unforeseen reasons, you can still qualify . However, the maximum amount of tax-free gain will be reduced.
If you do not live in the house all the time that you own, for example if you used the house as a rental, then converted to your primary residence, you may need tax on some of the gain.
deduction for private mortgage insurance
If you put less than 20% down when you bought your home, you may have to pay private mortgage insurance. These premiums are always deductible for 2013.
Were tax breaks a factor you considered when you purchased your home
Credit: Photo via Dean photopin cc
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