You’re a new homeowner who loves taking on the responsibility of maintaining a pristine household, complete with decadent coats of paint and weatherproofing for your roof. You also smartly bought some homeowner’s insurance to protect you and your family from accidental damage. But did you know there are many tax benefits that come with owning a home?
Erath County homes are not just pretty on the outside and downright gorgeous on the inside. They also come with tax deductions applicable to your monthly pay check, allowing you to receive more money to pay off your mortgage. Your tax consultant or accountant will have more information and specifics, but here is a quick overview of taxes when owning a home.
The most important difference when filing your tax returns as a homeowner is itemizing deductions in Schedule A rather than your usual method. While a little more complicated due to filing claims on property taxes, homeowner’s insurance, mortgage interest, and charitable efforts, the overall tax deduction is much higher and worth the time invested. For example, if your tax bracket gives you a rate of 33%, you can expect a return of 33 cents for every dollar spent in mortgage interest.
If you’ve recently or always wanted to remodel parts of your home, you won’t see any major benefits right away. However, when you decide to sell your home, those new additions will increase the base price of your property as well as lower the gains on the sale. Because of tax exclusions on home sales, sellers can expect not to pay the capital gains taxes provided it’s their primary home.
Another two benefits for owning a home came with the American Taxpayer Relief Act of 2012, which restored a deduction for mortgage insurance premiums and gave tax breaks for up to $500 for making homes more energy efficient. If a homeowner makes the effort to replace appliances with greener models like a new water heater, better insulation, tighter window framing, or air conditioners, the IRS will apply the tax credit.
Interested in learning more about Stephenville homes? Please contact us.