7 Common Real Estate Tax Deductions
Since tax time is here, your friends at the Memphis movers decided to share some insider tips on real estate tax deductions so that you can get the most out of your refund. You might not qualify for all of them, but it’s better to at least know what benefits are out there so that if you qualify in the future you are familiar with certain benefits on your Memphis home.
Mortgage Interest Deduction: Taxpayers can reduce their taxable income by subtracting the amount on interest they paid towards their home in the past year.
Home Improvement Loan Interest Deduction: If you made capital improvements to your Memphis home, you can write them off of your taxable income.
Private Mortgage Insurance (PMI) Deduction: If a homeowner paid less than 20% down when purchasing the home then PMI is most likely being paid. This can be a deduction, but certain stipulations apply.
Mortgage Points or Origination Fees Deduction: Points or Origination fees are paid when a new loan or refinance of a home takes place. These points and fees can be tax deductible.
Capital Gains Home Sale Exemption: If there is a profit from the sale of the home, a homeowner may qualify to exclude up to $250,000 of that gain from income, double that if married and filing jointly. Ownership and use of the home as a principal residence is required for 2 of the last 5 years.
Deduction For Cost Of Selling A Home: (For use when the Capital Gains Exemption doesn't come into play or if the gain exceeds the limits) Real estate marketing fees, title insurance, legal fees, administrative costs and inspection fees are all considered selling costs. Selling costs can also include items otherwise considered repairs—painting, wallpapering, planting flowers, maintenance etc, if completed within 90 days of the sale and if completed to make the home easier to sell.
Property Tax Deduction: The property taxes paid to a local, state, or foreign governments are tax deductible. They must be charged uniformly against all property in the jurisdiction and must be based on the assessed value.
Find out from your accountant if any of these real estate tax deductions can be applied to your account.