3 Real Estate Tax Breaks You Can’t Afford to Miss
Homeownership is expensive, but it’s also valuable to the economy. So, the IRS rewards homeowners who care for their properties with tax credits.
These credits are valuable. In fact, they can save so much money come tax season that homeowners can’t afford to miss out on them.
Here are 3 tax credits not to be missed at tax time. Keep reading to learn how you can start saving.
1. Green Tax Credits
Tax credits are available for homeowners who have not only a green thumb but a green state of mind.The IRS offers credits for qualifying expenses on upgrades or new purchases of home assets.
Homeowners who install doors, windows, and skylights with an ENERGY STAR program rating can qualify for as much as $500 in tax credits.
Solar energy systems are another way to scoop up tax credits galore. Homeowners can write off up to 30% of the systems’ cost with no limit until 2019.
2. Capital Gains Exemption
Homeowners who bought inexpensively in up-and-upcoming neighborhoods and can reap the benefits when sale prices are significantly higher than the initial investment.
If a home was purchased for $250,000 and it is now worth $500,000, the homeowner is in luck.
Any money made on the sale of that house is pure profit – no capital gains taxes are required.
There are a few rules governing this exemption:
- The maximum amount that can be exempted for couples is $500,000.
- The owner must have owned the home for two years.
- The owner must have used the property as a primary residence for two years.
Note: The owner doesn’t need to be living in the property at the time of sale. It can be rented for up to 3 years before the sale while still qualifying for the exclusion.
Unlike other capital gains profits, proceeds from the sale DO NOT need to be re-invested. They can be used in any way, including in the investment of a new property.
Alternatively, the 1031 exchange listings allow property owners to sell their properties and re-invest the profits in a new property as a way to avoid capital gains tax.
3. Mortgage Interest Deductions
The mortgage interest benefit is one of the most common tax deductions because everyone can deduct it. The only rule is the limit – $1 million for married couples or $500,000 for married couples filing separately.
The only rule is the limit – $1 million for married couples or $500,000 for married couples filing separately.
The mortgage interest deduction is filed with Form 1098. The average homeowner can see a deduction of thousands of dollars annually on their income taxes.
The average homeowner can see a deduction of thousands of dollars annually on their income taxes.
So while it’s not a credit per se, it does reduce the tax bill quite significantly depending on the size of the mortgage and the homeowner’s income.
Homeownership isn’t all about spending money – there’s money to be saved, too.
Be sure not to miss out on these or any other potential tax credits next year!
- The 8 Best Real Estate Apps For House Hunters
- 6 Real Estate Blog Monetization Tips You Will Love
- A Simple Guide To Buying A Home With Bad Credit
- 3 Digital Real Estate Marketing Strategies That Work
- 15 Rustic Kitchen Decor IdeasAre you looking to give your kitchen a rustic makeover, but not sure where to start? Here are 15 rustic kitchen decor ideas for inspiration.
- 10 Mistakes When Setting Up a WebsiteAre you looking to set up a website for your business? Read our website 101 guide to learn the 10 mistakes people make when setting up a site.
- How to Prepare For Your First Trip to a Shooting RangeGoing to the shooting range for the first time can be extremely nerve wracking. Being prepared is essential. Here's what to expect your first time.
- 10 Best Law Apps for Law School StudentsMobile apps are great ways for law school students to expand their methods of studying. Here you'll find the 10 best law apps for law school students.
- The 10 Best Places to Swim With Clear WaterIf you dream of relaxing in clear, blue water then don't miss this article. Click here to discover the 10 best places to swim with clear water.
- 8 Ways You Benefit From Selling Vape Products OnlineHave you thought of what your vape business gains by creating an online store? Here's how joining the digital world and selling vape products online helps you.
- 10 Best Garage Door Apps of 2017Hate when you can't remember whether you closed the garage door or not? With a garage door app, that worry will be a thing of the past! Check out our top picks.
- 8 Home Improvement Apps for iOS and AndroidHaving some issues with your home renovation project? You might want to check out and download the top 8 home improvement apps for iOS and Android.
- What To Do if Your Car Breaks DownYour car breaks down and you have no idea what to do. Don't panic. Instead, read this article to learn everything you need to do in this situation.
- The 8 Best Real Estate Apps For House HuntersAre you looking for a home and need to get housing information fast and on the go? Read here for our list of the 8 best real estate apps for house hunters.
- Business and Finance
- Clothing and Accessories
- Computers and Internet
- Cyber Security
- Digital Downloads
- DIY (Do It Yourself)
- Food and Drinks
- Gadgets and Gizmos
- General Knowledge
- Home Improvement
- How To's
- Online Business
- Pets and Animals
- Politics and Government
- Real Estate
- Religion and Faith
- Self Improvement
- Social Media
- Sports and Recreation
- Travel and Leisure
- Web Design and Development
- Website Promotion