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A Tax Shelter You Can Live In
Homeowners reap tax rewards while investing for the future
Owning a home provides privacy, security and a sense of community. But aside from many personal advantages, homeownership comes with a major financial advantage - tax benefits.
Century 21® professionals explain that owning a home verses renting can lead to a significant amount of savings when tax time rolls around. Century 21 offers some information, but also advises that taxpayers should always seek advice on such matters from a tax professional.
Benefits for taxpayers include:
Most homeowners can deduct property taxes and interest paid on their mortgage every year of ownership. Interest paid on a second mortgage may also be deductible if the total of the first and second mortgages is no greater than one million dollars. Homeowners can borrow against the equity they build. "Buying a home is an investment for your future," said Tom DePasquale, tax advisor, Jackson Hewitt Tax Services, Parsippany, NJ. "Equity from a home can be used to improve the property, buy a car or pay for an education, and the homeowner may have the ability to deduct the interest from their federal taxes. Renters never have this opportunity." Single tax payers owe no tax on the first $250,000 of profit from the sale of a principal residence. The amount is $500,000 of profit for married couples filing jointly. Certain closing costs may be deductible if the move is job-related and the relocation is 50 or more miles from the previous residence. Depending on where you live, certain real estate tax exemptions apply for people who meet specific criteria. "In New Jersey for example, disabled war veterans and their surviving spouses are exempt from real estate and property taxes. Homeowners should check with local tax consultants to see if any exemptions apply to them," said DePasquale.
Is there a best time of year to buy a home? "In regards to your income tax return, the earlier in the year, the better. If you purchase a home during the first six months of a year, you have deductible closing costs, and more months of deductible mortgage interest," said DePasquale. "Of course in the long run, owning a home will save you money on your taxes regardless of when it is purchased."
If you have any further questions as to how to gain tax advantages, we can help. Learn more about real estate investing from us. Call Bradenton's Best Team Toll Free: 1-888-858-3344 or local (941)374-5555, E-mail Us or On-Line Form 
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