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Tuesday, April 15, 2014

When You Own a Home, You Save Big with Tax Deductions

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Things to Know Heading Into Tax Season


It's that special time of year again here in Athens - Tax season. You may gave gotten a refund or you may be paying an additional income tax, but either way I would like to share with you some things that deal with how real estate pertains to taxes. There are some things that you may or may not be taking advantage of, so I would like to tell you about them.
  • If you're currently renting a home, you're missing out on a good tax deduction from the interest that you would pay on a mortgage. For example, if you itemize your taxes you are then able to write off the interest portion of your payment when you make your house payment.
    • Let's say your house payment is $1,000 dollars a month. Over the course of a year let's just say that $8,000 dollars is the interest portion of that payment. So when you file your income tax you're able to deduct that $8,000 dollars from your income. So, if you're in a 25% tax bracket, you just saved yourself $2,000 dollars.
    • If you're renting in Athens and thinking about buying, now would be a great time to do so. Not only is the market getting better and interest is low, you also get a tax benefit.
    • Also, as you pay the principle, you build equity.
  • This same tax deduction can be applied toward investment properties. If you want to shelter some income and buy rental property, that interest portion of your payment is also deductible.
I do have to tell you that I am not an accountant or a financial adviser, so before you take this to heart, please consult with these professionals. I am only offering some friendly suggestions for you heading into tax season. 

As always, if you need any help with buying, selling, or investing in Athens real estate, please give me a call and I would be happy to give you a hand.