TAX season – Homeowners Benefit!

Tax season is upon us and homeowners know something you may not know. Owning a home can offer a host of benefits and can also save you money on your taxes.

According to Publication 53 of the IRS, there are numerous deductions and credits available for homeowners. These include capital gains, mortgage interest and even credits for energy-efficient upgrades. For the latest updates straight from the IRS see IRS - Publication 530

If you are interested in receiving a few extra credits on your tax return this year try Energy Star. This web site will spell out a number of home improvements including hot water heaters, windows and even door replacement that offer portions of the cost as deductions.

The IRS loves home owners, because according to the National Association of Realtors (NAR), "home owners pay 80-90 percent of all U.S. federal income taxes." With all of the real estate taxes earned, the IRS wants to encourage home ownership.

These credits and deductions benefit everyone, not just the wealthy homeowners. Did you know 91% of home owners who claim the mortgage interest deduction earn less than $200K per year, and the ability to deduct the interest paid on a mortgage represents significant savings?

For example, a single professional who purchased a 1 bedroom condo in 2010 for $500,000 with 20% down with a 30-year, fixed-rate mortgage with an interest rate of 5.0 percent, could save nearly $10,000 in federal taxes when they file this year (assuming a combined 38.5% federal/state/city) tax bracket. That is not include the real estate taxes that are also deductible.

For the latest in tax tips – View House Logic; a free source of information from NAR.