Learn how to use Home Ownership to get the maximum tax deductions/credits YOU deserve.

You already know that purchasing a home is one of the biggest investments you can make in your lifetime. However, many home owners don't know how to USE their home to their greatest advantage, tax wise. Owning a home is one of the biggest tax writeoffs that one can take while filing taxes. The reason that most homeowners do NOT get the deductions and credits that they deserve is because they dont know that they are out there. Do not let yourself fall into this situation. The government takes from you all the time, learn how to keep more of your hard earned cash where it belongs, in your pocket.

According to HouseLogic.com, "Home-related tax deductions, from mortgage interest to real estate taxes, can add up. If you’re married filing jointly with taxable income of $100,000, an extra $5,000 in deductions would lower your tax bill by $1,250. Tax credits, for such things as energy efficiency and homebuying, are even more valuable because they increase your refund (or decrease what you owe) dollar for dollar."

There are two types of deductions you can take, the Tax deductions for Non Itemizing Homeowners and Mortgage-Related deductions. There are two types of credits available and they are the Energy-Efficiency Tax credits and Homebuyer Tax Credits. Lets go over each of these briefly below and go over how they may help you.

Benefits of Tax Deductions for Non-Itemizing Homeowners

If you dont itemize your returns Schedule L allows you the ability to deduct real estate taxes and some disaster related losses

Instead of the $11,400 standard deduction (married couple filing jointly) Schedule L allows you to increase the deduction as much as $1,000.

Benefits of Mortgage-Related Deductions

Interest paid on the mortgage for your main and second home is usually tax deductible. To learn if you qualify for mortgage interest deduction visit HouseLogic.

Interest paid on second mortgages, home equity loans, and home equity lines of credit can also be deducted. Generally you can deduct the interest on up to one million if married filing jointly.

Points and certain fees paid to a lender to obtain a home loan may also be deductible.

Benefits of Energy-Efficiency Tax Credits

Home improvements made during 2009 aimed at lowering your energy bills could also lower your tax bill. The government is offering tax credits equal to 30% of the cost of qualifying projects

Learn how to claim your residential energy tax credits on IRS Form 5695.

Learn about all the restrictions on capped and uncapped credits at the energy tax credit rules.

Benefits of Homebuyer Tax Credits

If you purchased a home in 2009 or 2010 up to April 30th you may be entitled to a Homebuyer Tax Credit. To claim your homebuyer on IRS Form 5405. The IRS will need additional paperwork to verify the homepurchase, due to this the form may not be filed electronically.

Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before making ANY decisions in ANY transaction.

Credits to:
Tax Tips for Homeowners Preparing 2009 Returns

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