It’s that time of year again when we hustle and bustle to find all our receipts, invoices and everything else that comes along with preparing for our tax returns…especially if you are a home owner. It’s always interesting to know more about what you can deduct but sometimes it’s tricky finding the answers. Let us help you along the way on becoming more informed about what home ownership means in the tax saving world.
Did you know that there are a lot of different tax savings of being a Downtown San Diego Condo or Downtown San Diego Loft home owner? We call it “Effective Tax Benefits” when we speak in the language of a Downtown San Diego Real Estate specialist.
Well, to start with, the tax code provides us with a number of benefits for home owners. See the list on what you may be able to deduct;
• Property taxes and mortgage interest as well as other expenses from your federal income tax.
• Rental values of your home do not have to be counted for as taxable income.
• You may exclude, up to a specific limit, the capital gain from a sale of a home.
• You can deduct paid interest up to $1million in mortgage debt on your primary residence.
• You can deduct interest on a home equity loan up to $100,000.
• You can deduct itemized local property taxes.
• If you refinanced after 2011, you will be able to deduct points of fees related to refinance. The catch in this particularly situation is that you will have to deduct over the term of the loan. For example; one point is equal to 1 percent of the loan. Say that you paid 2 points on a $150,000, 30-year loan, or $3,000. You may in this situation claim $100 of that fee every year you own that home.
• If you made Energy Efficient Home Improvements such as installed energy efficient doors and windows, heat pumps, furnaces or insulation up to 10 percent of price up to $500 may be claimed.
• You can also make deduction on alternative energy equipment such as solar panels for electricity generation and solar water heaters. For these installations the deductions have no cap.
• If you replaced your old appliances with new energy efficient appliances a deduction may be allowed. Credit can vary from $25 to $225 based on what kind of appliances that was replaced.
• Did you have to renovate to keep the standards of a medical condition? You might be able to deduct the cost and claim as a medical expense.
• Natural Disaster Losses is also claimable but it would depend on date of the federal disaster declaration. The IRS typically requires the first $500 to be deducted from any claims.
We hope that these suggestions will help you get a clearer picture on what could be a taxable gain to you. Should you still have questions…visit the really informative website that the IRS has created called “Tax Tips for 2012” or the Mercury News article “Tax Benefits for Homeowners” for more information. ')}