last-minute
real estate tax tips
Early spring's budding trees and blossoming
flowers signal a warning alarm for the thousands of Americans
who have waited until the last minute to file their federal tax
returns. If you're one such "late bloomer", here are some real
estate-related tax deductions and credits to mull as the Ides of
April draw near.
Owners
Mortgage Interest - Most homeowners will be able to deduct all
of their home mortgage interest for the year. For married
couples filing jointly, mortgage interest is deductible for
loans with of $1 million or less (the figure is $500,000 or less
for those who are married and filing separately). In order to
take a home mortgage interest deduction, the property must be
either the primary home or a second home not used as a rental
during the year.
Home Improvement Loan Interest - Interest on home improvement
loans is deductible without a set dollar limit, provided that
the money is used to finance "capital improvements" to the
property. "Capital improvements" are those that add to the
home's value, significantly prolong its life or adapt it to new
uses.
Property Taxes - Property or "real estate"
taxes are fully deductible from taxable income. City or state
property tax refunds will reduce the federal deduction.
Home Office Deduction - If an area of the home is used
exclusively for business purposes, one may be able to deduct
home expenses related to that area.
Sellers
Capital Gains - Home sales have become a real tax haven since
the inception of the Taxpayer Relief Act of 1997. Up to $250,000
(if single or a married couple filing separately) or $500,000
(if filing jointly) of profit of a home sale is tax-free if the
home has been a primary residence for at least two of the last
five years.
Moving Costs - If asked to are relocating to begin a new job, it
may be possible to deduct some moving costs. Qualifying for
these deductions can be complicated; but if the requirements are
met one can deduct the cost of travel, storage or lodging.
Selling Costs and Capital Improvements - The amount of selling
costs - including broker's commissions, legal fees, and
inspection fees - can be deducted from the capital gain of the
home sale. Decorating or repair costs can also be deducted if
the work is done within 90 days of the sale and for the purpose
of making the home more marketable.
Buyers
Points - The "points" charged by a mortgage provider for a new
home purchase, which can easily total thousands of dollars, are
fully deductible. Commission charged by the mortgage broker is
not deductible.
Mortgage Tax Credit - A program called the Mortgage Credit
Certificate (MCC) gives low-income first time homebuyers a tax
credit of up to 20% of the interest payments made on the home.
The credit is available each year the buyer keeps the loan and
lives in the house purchased with the certificate. The remaining
80% of the interest can be taken as a mortgage interest
deduction.
More Information
For more information on real estate-related income tax credits
and deductions, visit the IRS website at
www.irs.gov. Among the
most useful documents:
* Publication 530: Tax Information for First-Time Homeowners
* Publication 523: Selling Your Home
* Publication 527: Moving Expenses
* Publication 587: Business Use of Your Home
* Publication 936: Home Mortgage Interest Deduction
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GUIDE TO
McHenry County
This handy guide was developed by
to assist homeowners and potential home buyers in
finding shopping, restaurants, golf courses, hotels, services,
etc., in Northern McHenry County. Click the link below to
open the guide in a new window:
Shopping & Services Guide for McHenry County
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When to Start
Looking For a Home
Don't wait until you have the
money! Most buyers aren't aware of all the financing options
available to them that require little or no down payment. Ask your
"Buyers Agent" to recommend qualified & reputable lenders.
Check into your mortgage
options. You'll want to obtain a written "Pre-Approval" from a
mortgage lender indicating the amount you will be qualified to
borrow.
Where would you like to live?
Do you want to be in a certain school district? Need to be close to
major highway or train? Concentrate your beginning point there.
Think about your household
needs. How many bedrooms you need, floor plan or design, size of
garage, etc…
Are you renting? Allow
enough time so that when you are ready to move, you will be able to
go right into your new home. Your "Buyers Agent" can help you time
it just right!
Begin researching the market
before you intend to buy. Start 6-9 months early! Ask your
"Buyers Agent" to start sending you listings. Through the internet &
your e-mail you can receive automated "up to the minute" notice on
homes that fit your criteria and price range as soon as they become
available to the market. Through "Connect MLS" (A direct link to the
Multiple Listing Service of Illinois which services 1000's of
listings from all it's member offices)
Learn about disclosures and
contracts. Last but certainly not least, have your "Buyers
Agent" sit down and educate you on the many forms and documents you
will be asked to sign. It is a complex process that has many
potential pitfalls and glitches that demand the undivided attention
and involvement of a Real Estate Professional who has been trained
in the intricacies of negotiating and finalizing a transaction to
completion. For many people, buying a home is an extremely emotional
experience. Technology is a wonderful and powerful too, but that's
precisely what it is. It cannot and never will be able to offer the
assurance, guidance and friendship that are unique to the kind of
personal interaction which a "Buyers Agent" and their clients enjoy.
It's important to have someone to guide you through the process,
strongly negotiate on your behalf and ensure you're playing with the
market, not against it!
We work hard for you! |
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agent profile
Mary Opfer
Managing Broker, E-Pro, ABR, ASP Buyer & Seller Representation
Mary Opfer is the leader of The Mary Opfer Team
at REMAX Unlimited Northwest in Cary, Illinois. Dedicated
to providing service with quality, value and integrity to
all, Mary has been buying and selling homes and real estate
in the Village of Cary and the Cary Grove area since 1989,
and has closed in excess of 118 Million Dollars in career
sales …and counting. |
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