Top 4 Major Tax Benefits to Owning a Property
Home ownership has its privileges, including saving money at tax time! Here are the current major tax deductions home owners enjoy as of Jan 1, 2014 and the top major tax benefit to owning a property today.
- Mortgage Interest.
- Property Taxes.
- Points – “Discount Points” are a cost paid to “buy-down” the interest rate. Point costs are tax deductible.
- Only some renovations are tax deductible. Solar panel, small wind turbines, geothermal heat pumps and solar powered water heaters for example are tax deductible through 2016.
Note! Mortgage insurance premiums paid or accrued after December 31, 2013, were supposed to no longer tax deductible but the Obama administration extended the ability to write off mortgage insurance premiums for the tax year 2014.
Home owners are allowed to write-off mortgage interest and property taxes annually along with discount points paid at the time of purchase and limited renovations. Writing off these expenses allows the home owner to not pay taxes to the IRS on the amount deducted. To fully understand these tax rules, visit the IRS website or contact your CPA or tax preparer.