Tax Benefits of Home Ownership

February 14th, 2012 by Anne West
Categories: Real estate

Given all the challenges homeowners have faced in the last few years, we often forget about all the benefits to owning your own home. Among the benefits are the tax deductions for those who qualify. Here are six of the top tax advantages of home ownership,courtesy of Buffini and Company:

Write off the interest you paid on 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 alternative 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 your home buying expenses, including loan origination fees, prorated 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 earnings 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.
Rent your home out for up to 15 days and keep the income generated – it’s not taxable.

* Not an eligible deduction if you are subject to the AMT.

Tags: home ownership benefits, tax deductions for home owners

This entry was posted on Tuesday, February 14th, 2012 at 6:59 pm and is filed under Real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

House Tax Deductions said at March 10th, 2012 at 6:33 am
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