Tax Advantages of Home Ownership

Tax Advantages of Home Ownership

While you build equity in your home by paying off your mortgage, many of the expenses of maintaining the home provide you with several tax deductions. The higher your income, the greater the limits placed on the deductions, and some requirements must be met before they take effect. Here are some examples of deductible expenses:

• Interest paid on your mortgage, as long as the acquisition mortgage amount does not exceed $1 million.
• Interest paid on home equity loans – not more than $100,000 is deductible.
• Casualty losses from fire, storm, flood, earthquake or other such incident. The loss after your insurance reimbursement must exceed $100 and 10% of your adjusted gross income.
• Home-office costs that qualify.
• Local real estate property taxes paid on a principal residence or second home.

For details about the many tax breaks for homeowners and assistance with your tax return, be sure to consult your tax advisor.