Roberta Oswald
Roberta Oswald, Valley Property Sales & Management
Email: [email protected]

Common Tax Breaks for Homeowners

by Roberta Oswald 06/30/2019

Do you ever wonder why so many Americans dream of owning a home? From complete privacy to a nest egg in the future, one lesser-known but vital reason why homeownership is something everyone is longing to achieve is the tax breaks it provides. No one enjoys paying taxes so owning a home set you aside for tax breaks that renters are not able to claim So whether you are gearing up to buy a house or you are a homeowner preparing to file your taxes the season. This post will cover six significant tax breaks homeowners can enjoy.

What Are Tax Breaks?

You might think the term "Tax break" is another real estate complicated term but actually, it is not. Here is how ridiculously easy the meaning is: A Tax break means the government is providing you a reduction in your taxes. Plain and simple. Here are some common tax breaks for homeowners.

Common Tax Breaks for Homeowners

Mortgage Interest

Owning a home comes with several perks. One of them is that you can deduct the interest paid on the initial and second mortgage up to a million dollars in mortgage debt. To be eligible for a mortgage interest tax break, you must fulfill these requirements:

- You must have filed an IRS from 1040 and listed your deductions

- The mortgage must be a secured debt on a qualified home in which you are the owner.

State and Local Property Taxes

The property taxes from your city or State can be deducted from your income annually. But please note there is an exclusion to the deductible expenditure.

Rental Income

As a homeowner, when you rent out a room in your house or even the entire place will make you eligible for a 20% deduction on business income.

Equity Loan Interest

Another tax break you can enjoy as a homeowner is that you can lessen the amount of interest you pay on your home equity loans. However, there is a limit to the number of debts you add within the "home equity" scope.

Home Office Expenses

Working from home is the new norm of the 21st century, and many homeowners are taking full advantage of their space. If you work from your home, you will be able to reduce costs for the office space on your itemized deduction.

Capital Gains from a Home Sale

Not all tax breaks come from owning a home. Selling you your home often gives you a kind of tax break which is only know by a few people. If you would like to sell your home in the future, the capital gain will allow you to keep the profit you get from selling the house without paying any tax on it.

If you want to know more about tax breaks to get prepared for the next tax season, discuss with your local accountant.

About the Author
Author

Roberta Oswald

 

A passionate polo player, aviatrix and fourth generation member of one of the oldest winery families in the Napa Valley, Roberta has lived in the Bay Area her entire life. She attended San Jose State University and graduated with a degree in Aeronautics and a Business minor before entering into the professional world. Dedicated to her community as well as her vocation, Roberta is the past President and member of the local Soroptimist International organization. She is also an active member of a number of local Chambers of Commerce. Because of her longtime residency and her civic involvement, Roberta has an acute awareness of the needs and wants of families in the area. She knows the schools and neighborhoods, as well as the services and benefits available. Roberta is a valuable information resource for those new to the area as well as those who are simply changing neighborhoods or looking for investment properties. Roberta has over eighteen years of experience in buying and selling real estate in the residential, investment and commercial markets. She started and operated two specialty businesses on the Peninsula prior to joining Up Valley Real Estate in 2003. Not content to just “get the job done”, she wants to exceed your expectations. Roberta believes in service with commitment. Utilizing the kind of knowledge that is obtained only through extensive life experience and an in-depth understanding of the area and local market, she works with you to provide the maximum results. During her accomplished career, Roberta has refined important skills in communication, negotiation, attention to detail and sound business practices, all of which are vital to the success of her real estate clients today.