Princeton Town Topics – Let’s Talk Real Estate – March 7, 2012
HOMEOWNER TAX DEDUCTIONS
It’s tax time again, and if you are a homeowner, you can take full advantage of several homeowner tax breaks: Property taxes on homes and vacation properties are completely deductible, and interest paid on home loans is deductible up to $1 million. Additional borrowing up to $100,000 in equity loans, refinancing or second mortgages also qualifies for federal tax deductions. This is important, because most of your monthly payments during the first few years of your loan is made up of deductible property taxes and interest.
When you sell your primary residence, some of the profit you make can qualify for tax breaks as well. The 1997 Tax Relief Act allows you to exclude your first $250,000 of capital gains, if you are single, or $500,000 if you are filing with your spouse. All of these factors add up to significant savings on your taxes. Be sure to ask your tax advisor how you can make the most of your homeowner status this April 15th.
