With April showers come…Tax Day?! April 15, 2015 marks the day that Americans must file federal and state income taxes, a rite of passage for democracy. Though it’s often touted as a dreadful day, homeowners receive some breaks on Tax Day.
In addition to the financial benefit of building equity in the home and establishing a long-term savings opportunity, homeowners get to take additional tax deductions.
3 Tax Benefits to Homeownership
Indiana Homestead Exemption: If you own a home as your primary residence, your home and up to one acre of land could qualify for a deduction, which is either 60% of your assessed valuation or $45,000, whichever is less. The homestead credit amount equals up to 25% (17% state and 8% county) of your gross tax according to current Indiana Code, depending upon your taxing district.
Mortgage deduction: If you have a mortgage on your home, the tax code allows you to deduct interest from your tax obligations. For most homeowners, interest makes up the largest part of the mortgage payment in the first several years of owning a home. This tax deduction adds up to significant tax savings for many people.
Some closing cost deductions: Whether you or the seller pays your origination fees on your loan, the first year you buy your home, you are able to claim the points. These savings can be significant because origination fees are often more than 1 percent.
Be sure to consult your tax professional for details specific to your home and tax liabilities.
To find a home and start reaping these tax benefits of homeownership today, contact Ted O’Donnell, experienced Indianapolis real estate professional.
By Ted O’Donnell, talktotucker.com/ted.odonnell
