Tax Time is Almost Here! Use your Home to Your Advantage

If you’ve ever heard someone say that a home is a great tax break, they’re not kidding! As a homeowner, there are many tax breaks you can get from your Ponte Vedra home at tax time, so be prepared to take advantage of owning a home when filing your federal income taxes!

The following tax breaks should be considered when preparing your year-end tax return:

• Mortgage Loan Interest – All those payments you’ve made on your Ponte Vedra home over the last year are now paying off in the form of a sweet tax-deduction, considering that the majority of your mortgage payment in a loan’s early years goes toward the loan’s interest.

Your paid mortgage loan interest is tax deductible, both on your first and second home. Don’t forget that your home equity loan interest is also deductible, but is much less than your mortgage loan interest.

• Mortgage Points - Any points that you paid on your mortgage loan are tax deductible. You can also deduct the points on a refinanced mortgage, but only when they are amortized over the life of the loan.
   
• Property Taxes - Your paid property or real estate taxes are fully deductible.
   
• Capital Gains Exclusion – The Taxpayer Relief Act of 1997 allows married taxpayers who file jointly keep up to $500,000 profit from the sale of their principal residence, tax-free.
   
• Reducing Capital Gains – Your taxable capital gains can be reduced by the amount of your selling costs, which may include title insurance, real estate commissions and legal and inspection fees. Any repairs that you made to your home within 90 days of the sale are all considered to be selling costs.
   
• Energy Tax Credits – Don’t forget that any energy-efficient home improvements you made to your home may qualify for a tax credit of up to $500. Some improvements may include installing energy-efficient windows, fuel cell systems, insulation, or heating and air conditioning units.

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