You can save thousands by understanding the tax advantages/disadvantages of homeownership.
It’s no government secret that one of the biggest perks of owning a home are the tax write-offs once the purchase has been made. It can be pretty easy to see the perks or tax liabilities, only to forget claiming them when tax season rolls around. Learn the benefits of homeownership when it comes to your tax write-offs.
- Being a landlord
Real estate investors will know the complications that arise when you hold onto, sell, or rent properties. Rental income is subject to the regular income taxes (federal and state), even if you just rented a room in your house for just a few days. In some select cities, you may be required to obtain a business license and be subject to pay landlord taxes. Also, the state government is cracking down on people who rent portions of their house and forcing them to pay hotel taxes.
- Refinancing
Refinancing into a lower interest rate means that you’ll be paying off your home quicker and have the same monthly payment. You also get a potential tax deduction based on your mortgage interest.
- Renting
Renting isn’t something people necessarily want to do, it’s just the best option until they can afford to buy their own place. There are people out there that—despite having sufficient income—are still renting, for one reason or another. Someone who does not want to buy a home should not purchase one for the sake of tax purposes.
- Remodeling
When you remodel your home, please (oh, please!) make sure that you save your receipts! It’s not just until tax season is over, save them until you actually move. The money you spend on improving your home can be added to your purchase price, and, when you sell, can lessen the amount the IRS considers to be capital gain and reduces the odds of you incurring capital gains tax.
For all of your home buying & selling needs to ensure you never miss out on any of the benefits of owning/renting, contact Ranch & Coast Mortgage Group Inc. in today!
