Don’t Miss Out On These Important Tax Savers For Home Owners

Posted by Brook Walsh on Tuesday, February 5th, 2019 at 6:20am.

The tax filing deadline is quickly approaching. If you own a home, here are some important residential tax-saving incentives you should not miss:

Residential Energy Tax Credits

  • Residential Energy Efficient Property Credit - Taxpayers may take a credit up to 30% of qualified solar, wind, geothermal and fuel cell property improvements. This includes labor costs to assemble, build, and connect the equipment. The credit is capped at $500 per one-half kilowatt of capacity purchased.
  • Non-Business Energy Property Credit - Taxpayers may take credit for 10% of the qualifying costs to improve energy-efficiency for the non-business property. Qualified improvements include adding insulation, energy-efficient windows/doors, or energy-efficient heaters and A/C. The credit does not apply to energy-efficient appliances. The maximum credit is $500; with a lifetime limit of $500 for improvements placed in service after 2015. The $500 credit is allocated as follows: $200 windows; $50 for circulating fan; $150 for qualified furnaces, heaters, etc.; and $300 for any energy-efficient building property.

Residential Tax Deductions

  • Mortgage Interest Deduction – Taxpayers who itemize may deduct mortgage interest and certain finance acquisition costs (e.g. points).
  • Property Tax Deduction – State and local property taxes are also deductible for those who itemize.

Capital Gains

  • Gains on the sale of real estate are usually untaxed up to $250,000 for single taxpayers and $500,000 for married filing jointly. Gains over these amounts will be identified on Form 1099-S. Your cost basis can be adjusted with adequate record-keeping of the improvements you have made to the home over time.

Tax Filing Deadline

For 2019, the tax filing deadline is Monday, April 15th.  To avoid penalties, all tax returns must be e-filed (or postmarked) by midnight on April 15th. If you missed out on any of these tax incentives, you can amend your returns after the deadline (you have three years to do this). Always seek the guidance of an experienced tax professional when making a home purchase or improvement decision based on the tax code. 

Brook Walsh is from Northern Michigan and understands lifestyle based real estate investing which is one of the reasons he's chosen to pursue his dream of helping real estate investors with their home buying needs. Learn more about Brook or start your home search now.

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