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Showing posts with the label Tax Benefits

Don't-Miss Home Tax Breaks

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Courtesy of: Dona DeZube   (Published: January 10, 2013)   From the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns. Mortgage interest deduction Private mortgage insurance deduction Prepaid interest deduction Energy tax credits Vacation or second home tax deductions Home buyer tax credit repayment Property tax deduction Mortgage interest deduction One of the neatest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet. Interest you pay on a mortgage of up to $1 million — or $500,000 if you’re married filing separately — is deductible when you use the loan to buy, build, or improve your home. If you take on another mortgage (including

4 Energy-Efficient Renovations Homeowners Should Consider

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Homeowners should be proactive in making energy-efficient home renovations in order to receive the rebates outlined in President Obama’s new “Home Star Retrofit Rebate” program, recently introduced in Congress. If passed, the proposed $6 billion program could reduce energy costs for middle-class families by hundreds of dollars a year. Here ios an easy check-up list every homeowner can do to optimize the energy efficiency of their home: Windows and Doors Holes in windows and doors allow conditioned air to leak from your home and allow outdoor air to infiltrate, which can tax your heating and cooling systems and raise your energy bills. Caulk around windows and doors where there are gaps. Also caulk areas where plumbing lines or electrical wiring extend to the exterior of the home. Floor and Wall Insulation Insulation acts as a barrier to heat movement and helps keep any home cooler in the summer and warmer in the winter—all while using less energy. Making sure insulation is used at pote

Make Sure You Are Getting the Best Tax Advice

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Recently I had a client call me to complain about how upset she was regarding the fact that she was only getting half of the $8000 tax credit. She had purchased a duplex a couple of months ago and was expecting to receive 10% of half of the sales price (since she was renting out the other half of the duplex and receiving rental income). She was, therefore, expecting to get $7500 (10% of $75K instead of 10% of the full purchase price of $150K) She was very upset because she had recently been to H&R Block to have her taxes done and they insisted on the fact that she was only entitled to half of the tax credit ($4000) rather than 10% of half of the purchase price ($7500). Now, I am not a tax accountant and don’t even pretend to be. But, I called the IRS and they confirmed that this is indeed wrong . She was indeed entitled to 10% of half of the purchase price ($7500), NOT half of the tax credit ($4000). So, don’t assume that H&R Block knows what they are talking about. If you

Tax Benefits of Owning a Home

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Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone. Here’s why: Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home. Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World. Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent. Home owners can itemize. That opens up opportunities to deduct a host of other ite