Real Estate Tax Tips for Property Owners
Each year real estate tax deductions change from what you can deduct on your current taxes. When you file your taxes for 2014, you will notice that the terms are very similar to the 2013 tax terms. Therefore, I have some tax deductions for you to consider when filing your 2014 taxes.
Real Estate Tax Tips
Private Mortgage Insurance – While homeowner’s insurance is not tax deductable, private mortgage insurance is tax deductible and will show up on your 1098.
Second Homes & Vacation Homes – Interest payments on your mortgage loan and property taxes are tax deductible on your second home. You may also qualify for deduction on business expenses and rental properties.
Mortgage Interest Limits – There are limits on how much tax you can deduct from your mortgage loan interest. The limit is $1 million on your primary residence and $100,000 on your second mortgage.
Home Office Deductions – If you run your business out of your home, you can deduct $5 per square foot or up to 300 square feet of space from your taxes. This will apply to electric, gas, water, phone, etc.
Home Equity Loan Deductions – If you have a home equity loan that is secured by your primary residence, you can deduct that from your taxes. Your bank will send you a 1098 showing the amount of interest you paid and what is tax deductible.
Casualty Losses – If your home suffered damage from storm, fire or water, you may qualify for casualty losses on your taxes. However, this will be based on your next loss after your insurance company paid the claim. And, it must be more than ten percent of your adjusted gross income.
Exclusions From Sale Gains – This decade old rules is worth noting. Real estate in 2014 qualifies for an exclusion on the net sales gain from a home sale. This is a limited rule with limits of $250,000 for individuals or $500,000 for couples. Also note that this rule only applies to home that have been your primary residence for two of five years. So, if you moved out, you must live in the home a full five years before you can use this tax exclusion.
It’s always worth using a tax professional who can help you with all tax deductions since we have not listed them all hear. You want to get all the breaks you can when it comes to taxes.
This real estate tax related information is brought to you by: Tom and Bev Herring, buying and selling Tulsa Real Estate, Broken Arrow Real Estate, Jenks Real Estate, Bixby Real Estate and Owasso Real Estate as well as Keystone Lake Real Estate, Berryhill and Sand Springs Real Estate.
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Now that you’ve taken the big step toward the American dream of becoming a homeowner, you need to know what tax deductions for homeowners are out there. The good news is there are plenty of home related expenses you can deduct, whether you live in a single-family, town house, condo or mobile home. The bad news is, if you want to take complete advantage of your homes deductions, it can get more completed and you may need the help of a professional.
However, many homeowners believe the effort that goes into itemizing is worth the time. So, if you believe that itemizing is right for your tax situation, we have some homeowner tips for what you can deduct, things you can’t and how to get the most from your taxes.
Mortgage interest will be your largest tax break. For most homeowners, the bulk of your monthly mortgage payment goes toward interest. So, it’s all deductible, unless your loan is more than $1million. Loans over $1million are limited on tax deductions.
If you refinanced your home or got an equity line of credit for less than $100,000, it is fully deductible. And, if you own multiple properties, your mortgage interest is also fully deductible.
If you paid points to get a better rate on your home loan, you will qualify for a tax break. You can deduct the points you paid in the year you paid them if your loan was to maintain a home or build a home. Furthermore, if you paid points to refinance your home loan, you are eligible for a tax break. This will also apply to home equity lines of credit.
Other Big Deductions
Property taxes are another big deduction you can use. In many cases, your property taxes are paid to an escrow account and paid out annually. You should see this amount in your yearly tax statement from your mortgage company. So, as long as you own your home, you can use these taxes as an annual deduction.