Tax Benefits for Homeowners

Posted on by rmgmav1

There are many reasons that people want a home of their own. Some reasons are a place to raise your family, a house to open to friends and a place to feel secure and safe. Investments rank high on most peoples priorities based on the fact that a homeowners net worth is more than forty times more than that of renters as well as the tax benefits that reduce tax liability.

  • Owner occupants who have owned and used a house for at least two out of the last five years, can exclude a maximum of $250,000 of gain as a single taxpayer and up to $500,000 of gain for married taxpayers filing jointly.
  • If the gain on a principal residence exceeds the allowed exclusion, the balance is taxed at a lower long-term capital gains rate rather than the marginal tax rate of the homeowner.
  • Homeowners are allowed to deduct the interest paid on up to $1,000,000 of acquisition debt used to buy, build or improve their first or second home.  They can also deduct the interest on up to $100,000 over acquisition debt of a recorded lien on their first or second home.
  • The IRS allows taxpayers to decide each year whether they would like to take the higher of the itemized deductions or the standard deduction.
  • Points paid on new loans for home purchases are considered interest and may be deducted in the year paid. On the other hand, points paid for refinancing a home must be amortized over the life of the mortgage.

 

Debbie Woolard Group
(757) 288-0194
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www.DebbieWoolard.com
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Our focus is helping people find and exchange dream homes. We are seeking buyers and sellers that desire concierge level service including great communication, extraordinary representation and a continuing relationship for years to come.

You and your referrals will be provided with a great team of professionals to help with each step of the process. We are committed and passionate about negotiating the best possible terms and serving our clients at the highest level. Our goal is to create memorable real estate experiences where our clients become raving fans.

Realtors with the Debbie Woolard Group service Virginia Beach, Chesapeake, Norfolk, Suffolk, Hampton, Newport News & Portsmouth with specialist in seller representation, buyer representation, military relocation, first time home buyers, short sales and real estate investment.