{"id":1140,"date":"2021-04-12T14:02:53","date_gmt":"2021-04-12T14:02:53","guid":{"rendered":"http:\/\/www.mikeclover.com\/blog\/?p=1140"},"modified":"2021-04-12T14:02:53","modified_gmt":"2021-04-12T14:02:53","slug":"can-your-home-help-you-lower-your-income-tax-obligation","status":"publish","type":"post","link":"https:\/\/www.mikeclover.com\/blog\/2021\/04\/12\/can-your-home-help-you-lower-your-income-tax-obligation\/","title":{"rendered":"Can your home help you lower your income tax obligation?"},"content":{"rendered":"

\"Tax<\/a><\/p>\n

The answer is \u201cIt depends.\u201d Now that the standard deduction has been raised to $12,400 for individuals, $18,600 for heads of household, and $24,800 for married couples filing jointly, you may gain more by taking the standard deduction.<\/p>\n

However, it pays to check before you file. Take some time to do the calculations.<\/p>\n

Here\u2019s a rundown on the tax breaks available to homeowners who itemize.<\/p>\n

Mortgage Interest is first, foremost, and largest.<\/strong> Couples filing jointly can still deduct interest on up to $1 Million in mortgage debt if they purchased prior to December 15, 2017. For loans after that date, only the interest on the first $750,000 of mortgage debt is deductible.<\/p>\n

Since interest makes up the bulk of the payment in the early years of a mortgage, you may gain from this deduction, at least for a few years after a purchase or refinance.<\/p>\n

Your mortgage lender sends a statement at the end of each year showing how much you paid in interest, and if they\u2019re escrowed, how much you paid for property taxes and homeowner\u2019s insurance. If your debt is $750,000 or less and your mortgage interest is more than the standard deduction, do itemize. If the debt is higher, ask your financial advisor for help in doing the calculations.<\/p>\n

Mortgage Points are still deductible<\/strong>, but note that they must be discount points, not origination points. Points are, after all, just pre-paid interest.<\/p>\n

Private Mortgage Insurance is deductible for some borrowers.<\/strong> It is fully deductible if your adjusted gross income is less than $100,000. Between $100,000 and $109,000 it is 90% deductible.<\/p>\n

Interest on Home Equity loans is deductible \u2013 again, with restrictions.<\/strong> The interest is only deductible if home improvements are the purpose of the loan. You cannot deduct interest on a home equity loan used to fund a vacation or your daughter\u2019s wedding. Deductibility is further limited by the limits on deducting home mortgage interest. You may only deduct interest on $750,000 of debt on both loans combined.<\/p>\n

Property taxes offer limited relief. There\u2019s a $10,000 cap on tax deductions, whether property tax, state and local income tax, or deductible sales tax. You are allowed to bundle tax from all the real estate you own and deduct up to $10,000.<\/p>\n

Pet-related home deductions\u2026<\/strong><\/p>\n