It's National Homeownership Month in June and here's Reason #8 why you should own your own home:
OWNING A HOME PROVIDES TAX BENEFITS YOU DON'T GET WHEN RENTING
Owning your own home provides a number of tax benefits that you don't get when renting. And who doesn't want to save on taxes? Some of the tax benefits you get when owning your own home include:
Mortgage Interest: the interest you pay on your mortgage is tax deductible. And in the early years of a mortgage most of the payment you make is interest.
Home Equity Line: If you have a home equity line of credit (HELOC) that you use from time to time, interest paid on that loan is also tax deductible.
Points: if you paid points for your mortgage, they are typically tax deductible in the year they were paid.
Property Taxes: you can deduct property taxes on your income tax returns.
Tax-Free Profit on Sale of Home: the first $250,000 of profit on the sale of your home is tax free if you are single and the first $500,000 of profit is tax free for married couples.
Home Office: if you work primarily from home, tax benefits for the portion of the home you use for business will apply.
Home Improvements: while home improvements, per se, are not tax deductible, if you borrow to make improvements or additions to your home, the type of loan you incur can also provide deductions for interest paid on the loan.
Penalty-Free IRA Withdrawal: if you're a first-time buyer or even a second-time buyer, who has owned a home for at least two years, you can withdraw up to $10,000 from your 401K plan towards the purchase or construction of a home without paying the 10% early withdrawal penalty on the money.
- Lower Witholding Taxes: No need to wait until the end of the year to collect your tax savings from owning a home. You can adjust the amount of your W4 witholding and start "collecting" on the tax benefits with each paycheck.
As always, it's important to check with your personal accountant to make certain what tax benefits will apply to you specifically when you purchase, own, or sell a home. And you can find more information about tax deductions for homeowners here.
If you are considering purchasing a home in the Charlotte metro area, I would love an opportunity to earn your business, exceed your expectations, and to prove to you that:
Related Articles On National Homeownership Month:
Reason #1 To Own Your Own Home
- Reason #2 To Own Your Own Home
Reason #3 to Own Your Own Home
- Reason #4 to Own Your Own Home
- Reason #5 to Own Your Own Home
- Reason #6 to Own Your Own Home
- Reason #7 to Own Your Own Home