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Tax Benefits of Homeownership CONNECT with your local HBA accountants and tax experts Homeownership has many important benefits for millions of Americans across the country – including creating a sense of community, building wealth and providing financial security. And, at tax time, home owners can take advantage of several sources of tax savings, including: • Deductions for mortgage interest • Deductions for real estate taxes • The capital gains exclusion for the sale of a principal residence Mortgage Interest Deduction Home owners who itemize their federal income tax deductions can deduct 100 percent of their mortgage interest payments on a first or second home for up to $1 million of mortgage debt. The Mortgage Interest Statement Form 1098, which home owners receive from their lenders, shows the total amount of home mortgage interest paid during the year. Homeowners also can deduct the interest paid on up to $100,000 of home equity loans. For most home owners, this means they can deduct all of the mortgage interest they’ve paid on their home each year. Real Estate Tax Deduction Home owners are able to deduct the state and local real estate taxes they pay each year on an owner-occupied home. Capital Gains Exclusion When it is time to sell a home, in many cases home owners don’t have to pay capital gains tax on the profit from the sale. Under present law, married couples who have owned and occupied their principal residence for at least two of the past five years do not have to pay any taxes on the first $500,000 in profits from the sale of their home. Single filers earn up to $250,000 tax free. Additional Tax Savings Another deduction home owner’s may be able to take is for mortgage insurance premiums. Generally, people who purchase a home without putting 20 percent down have to buy mortgage insurance, and those premiums can also be deducted from taxable income. Even home owners who don’t use the home as their principal residence and rent it out may be able to enjoy some tax benefits, including interest and depreciation deductions. T Article provided by National Association of Home Builders 12 THRESHOLD FEBRUARY <strong>2019</strong>
Mortgage Meet our Professionals PURCHASE • REFINANCE • CONSTRUCTION Nick Watson Hiawatha 319-730-3227 Nathan Seyfer Downtown 319-731-2755 Jason Spengler Marion 319-730-3208 Brad Maras Westdale 319-730-3226 Felisha Junge Blairs Ferry Rd 319-730-3234 Mitch Hames Westdale 319-731-2778 Let’s discuss the options today. (319) 341-2125 uiccumortgage.com All loans subject to approval.
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Threshold Feb 2019

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