Tax Benefits of Home Ownership
Owning a home gives you the feeling of power and accomplishment. You can fix it up and decorate it inside however you want to make it your own style. There is no landlord to dictate that you can't paint or mount pictures on the walls. Owning a home means that it is your space and no one can legally come into it unless you say so, that's power.
These are all good reasons to have a place that you own and call home. But aside from these reasons, is an even more important reason, it makes financial sense. You are no longer giving money away to the owner of property just so you can unpack your bags there. The best part is that you are now building equity.
Oh, but there's more! Home ownership has tax benefits. It's always good to have a nice buffer between you and your tax burden.
You can deduct taxes for mortgage interest, home equity loan interest and, in some cases, mortgage insurance premiums are also tax deductible.
The tax deduction for mortgage interest is one of the most valuable tax breaks for homeowners.
Mortgage Interest: Your lender will send you IRS Form 1098, detailing the amount of interest you paid in the previous year. You want to also include any interest you paid as part of your closing. Lenders will include interest for the partial first month of your mortgage as part of your closing.
Also, the profit you make when selling a home is tax free up to $250,000, if you’re single, and $500,000, if you’re married and file taxes jointly. You have to have lived in the home for at least 2 years.
The money you pay in property taxes is deductible, too. If you pay your taxes through a lender escrow account, you’ll find the amount on your 1098 form.
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