As a homeowner, you can benefit from tax breaks,
As a homeowner, you can benefit from tax breaks that can shave thousands of dollars off from your IRS bill each year, which could mean a higher refund check. Since it’s that time of year when we are all gathering our documents and working on getting our taxes in ASAP, I wanted to remind you about what owning a home can do to help your tax situation.
And if you currently rent, becoming a homeowner means you’ll get some tax benefits that could make you like filing your tax return.
Read over the list below to see what could pertain to your situation. There are other deductions you might be able to take that I haven’t listed here, so be sure to always consult with your tax advisor. This isn’t tax advice, just a reminder of what to talk to your accountant about!
- Mortgage interest. If your home was purchased before Dec. 16, 2017, you can deduct the mortgage interest paid on your first $1 million in mortgage debt. For mortgages taken out since that date, you can deduct the interest on the first $750,000. You’ll want to talk with your accountant about whether it’s better to deduct the mortgage interest or take the standard deduction instead. The standard deduction is currently $13,850 for single filers and $27,700 for married taxpayers filing jointly. If you decide to deduct the mortgage interest, you’ll need to itemize your income taxes to claim this. Don’t just fill out the 1040-EZ without doing the math first to see whether itemizing or the standard deduction will result in the lowest tax bill – or highest refund – for you.
- Property taxes. Property taxes on all real estate are fully deductible. When you buy a home, check the settlement sheet to see if you reimbursed the seller for property taxes, he or she prepaid for a period you owned the home. If so, include that amount in your property tax deduction.
- Credit for green improvements. If you make qualified energy-efficient improvements to your home after January 1, 2023, you may qualify for a tax credit of up to $3,200. The credit equals 30% of qualified expenses including things like energy-efficient exterior doors and windows, insulation and air sealing materials, and even things like air conditioners and heat pumps. To learn more go here or check with your tax preparer.
- Investment Property/Rental Property. The cost of maintaining and marketing a rental property can be deducted from the income the property generates, without regard to the owner’s tax status. These expenses include mortgage interest payments, insurance, utilities, maintenance, repairs, advertising costs, and management fees, as well as the non-cash cost of depreciation.
- Home office. You can deduct the costs of a home office that you use exclusively as your principal place of business. This one is notorious for causing audits, so if you are going to claim this one, be sure to talk with your accountant about your situation and whether you qualify.
- Tax-free rental income. If you rent out your own home for 14 or fewer days during the year, the rental income is tax-free.
- Capital Gains: Remember, if you sold your principal residence, that you may not have to pay tax on the gain. The IRS typically allows you to exclude up to $250,000 of capital gains on real estate if you’re single and $500,000 of capital gains on real estate if you’re married and filing jointly. If you are selling an investment property, that’s where it gets a little more complicated, but you could do a 1031 exchange to avoid paying capital gains on that sale as well.
So, there you have it—some basic information to help you to the most advantage of being a homeowner regarding your taxes. But I’m no tax expert, be sure to talk to your accountant, CPA, or whoever is preparing your taxes—they will know best based on your situation.
And, if you don’t have an accountant and want to use one this year, I have several I can recommend. Just reach out to me and I’ll get you in touch. The only question now is, how are you going to spend that big refund check? I’d love to know!
For All Your Real Estate Needs, Move with Judith!
Looking for the right real estate agent to help you buy a home? Discover 10 expert tips to choose an agent who truly understands your needs, goals, and budget with Judith Watkins. Your local Realtor in the Hemet, San Jacinto Valley.
Closing Day Checklist for Sellers in Hemet and San Jacinto, CA
It’s finally here—closing day! But before you hand over the keys and celebrate the sale of your home, there are a few important steps to take to ensure everything goes smoothly. In this post, local Hemet and San Jacinto Realtor® Judith Watkins walks you through exactly what to do before, during, and after your home closing.
From final repairs and utility transfers to what to bring to the settlement table, you’ll find a complete, stress-free closing day checklist made just for sellers in the Inland Empire. This guide will help you avoid last-minute surprises and close with confidence.
Whether you're a first-time home seller or it's been a while since your last move, this article is full of helpful insights designed to make your closing day a success.
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Thinking of selling your home in Hemet or San Jacinto? Learn how to choose the right offer—not just the highest—while minimizing stress and maximizing your profit. In this post, Realtor® Judith Watkins shares smart negotiation tips, what to look for beyond price, and how to prepare for a successful sale. Whether you’re upsizing, downsizing, or relocating, these expert insights will help you make confident, informed decisions every step of the way.
How to Buy and Sell a Home at the Same Time in Hemet and San Jacinto, CA
Thinking about moving but not sure whether to buy your next home first or sell your current one? You're not alone. In this helpful guide, local Hemet and San Jacinto Realtor® Judith Watkins shares expert advice on how to successfully navigate buying and selling a home at the same time—without the stress.
Discover practical tips on timing your move, preparing your home for sale, understanding financing options like bridge loans, and how to avoid carrying two mortgages or being left without a place to live. Whether you're upsizing, downsizing, or relocating in the Inland Empire, this blog post is packed with actionable steps and real estate insights tailored specifically to the Hemet and San Jacinto housing market.
If you're a first-time home seller or a buyer looking to make a smart move in Southern California, this article is a must-read.
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Getting ready to move in Hemet or San Jacinto? The process can feel overwhelming, but with the right plan in place, you can stay organized and stress-free. From decluttering before you list your home to packing smart and notifying important contacts, this guide covers everything you need to know for a smooth transition. Whether you're moving across town or to a new city, these expert tips will help you prepare for moving day and settlement with ease. Read on to make your move a breeze! #movewithjudith
Selling your home in Hemet or the San Jacinto Valley? Once you're under contract, there's still plenty to do before closing day! From home inspections to final walkthroughs, preparing your home for settlement is key to a smooth sale. In this guide, I’ll walk you through the crucial steps to avoid delays and ensure a stress-free closing. If you're selling your home in Hemet or San Jacinto, this checklist will help you stay on track. Read more to get expert tips and avoid common pitfalls!
Selling your home in Hemet or the San Jacinto Valley? Don't celebrate just yet—your home appraisal can make or break the deal! Learn why appraisals matter, how they impact your sale price, and what you can do if your appraisal comes in low. Plus, discover the extra steps I take to protect my sellers and ensure a smooth closing. Read more to stay ahead in the home-selling process!
Selling your home in the Hemet & San Jacinto Valley? Negotiating the best deal is key! In this guide, I share expert tips to help you navigate buyer motivations, counteroffers, contingencies, and concessions—ensuring a smooth sale and top-dollar results. Whether you're a first-time seller or experienced homeowner, these strategies will help you close with confidence. Read more to learn how to maximize your home sale!
I’d love to share my full marketing strategy with you, along with examples of homes I’ve sold in Hemet, San Jacinto area, and more!
The Price is Right” -- 10 Tips to Price Your Home Perfectly
