3 Tax Breaks With Homeownership

It’s Tax Day, and we’ve got some good news if you’re a homeowner. There are serious tax benefits when you own your home.

The new Tax Cuts and Jobs Act, which went into effect on January 1, 2018, was the biggest overhaul to the tax code in over 30 years. It changed more than a few deductible items and impacted some of the most important tax advantages that accompany owning a home.

Property Taxes

Before the tax overhaul, property taxes were deductible in full. Today, the deduction is capped at $10,000 if you are “married filing jointly.” It doesn’t matter how high the taxes are; $10,000 is the limit. This can be used as part of the itemized list of deductions that must add up to more than $24,000 (the standard deduction for a married couple). For those itemizing their deductions instead of taking the standard deduction, the property tax deduction is a very important one.

Private Mortgage Insurance

Homeowners pay Private Mortgage Insurance (PMI) when they put less than 20% down on their home at the time of purchase. The new tax bill protected and extended the ability to deduct the interest on this insurance.  Set to expire in 2018, this deduction was saved and could reduce your tax bill by thousands.

Mortgage Interest

The mortgage interest deduction was for years the best tax break for homeowners. While the new tax law didn’t remove the option for this deduction, it did cause a significant change. Today, homeowners with a mortgage in effect before December 15, 2017 can continue to deduct interest on loans up to $1 million. For loans after December 15, 2017, the homeowner may deduct the interest on only the first $750,000. This is still a significant deduction only available to those who own a home.

There are so many benefits of homeownership, and we’re grateful we get to realize a few of them on Tax Day. A home is the most important investment most people will ever make. Be sure you’re getting every deduction, every advantage that comes with it.

Richardson Housing Group (RHG Homes) builds new homes in Atlanta.  For more information on our new home communities in Gwinnett, Jackson, and DeKalb Counties, including available homes, photos, floorplans, and more, visit us online at www.RHGHomes.com.  To keep up-to-date on the latest news and offerings by RHG Homes, check us out on Facebook at www.facebook.com/RHG.homes. You can also catch up with us on Twitter and see footage of our beautiful new homes and communities on YouTube!

Photo Credit: Pixabay via www.pexels.com

Sources:
https://www.nerdwallet.com/blog/mortgages/6-ways-tax-plan-could-change-homeownership/

https://www.irs.gov/

https://www.taxpolicycenter.org/briefing-book/what-are-tax-benefits-homeownership

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