The 2022 housing market is the hottest in several years, and that means people are throwing themselves into it with the hopes of making a quick buck or reducing their tax burdens. Before you rush into it, here are some real estate tax tips for buying, selling, and renovating your home. Tax Tips for Buying Your Home There are some great ways to save some money on real estate tax items if you know where to look. The first is on your 1098 – this is provided by your mortgage lender or servicer. It documents how much you paid in mortgage interest over the tax year, and you should get one if that interest totals more than $600. In order to claim a deduction for mortgage interest, you must itemize. You’ll use Schedule A (Form 1040) as well as the standard 1040. This form is used if you aren’t renting the home (you’ll use Schedule E instead) or running a business out of it (you’ll use Schedule C). And if you’re buying a house soon, or you just bought one, you can deduct prepaid mortgage interest (points). Here’s another tax tip: if your adjusted gross income is less than $100,000, you can deduct 100% of your mortgage insurance premiums as well. You should also remember that you can deduct state and local property taxes, with a limit of $10,000. However, there are several fees that aren’t deductible when it comes to real estate tax and the purchase of a home, including fees paid at or before closing (title insurance, appraisal, surveys, etc.), property insurance, depreciation, and utility payments. Tax Tips for Selling Your Home When it comes to selling your house, here are a few important tips and information. First, taxpayers who are single filers can exclude up to $250,000 of capital gains on the profits made from the sale of their home, and married couples can exclude up to $500,000. But there are some stipulations: the sellers must have owned and used the home as a primary residence for 2 of the last 5 years before the sale. The two years do …
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