Privacy & seclusion, this 2,200 sqft 6 bdrm 3 bath home is situated on an acre of flat and usable property, surrounded by over 1000+ acres of designated forest land. Extremely well maintained, upgrades include, custom cabinets, quartz counters, stainless steel appliances, wetbar and new decks. Need more? This home has a separate 2 bdrm, 2 bath 1,100 sqft apartment with laundry. 36×48” Shop, with 3 storage areas, elevator lift, even has its own laundry facilities and RV hookup. Amazing views $300,000 Call to schedule a showing
From mortgage interest to property tax deductions, here are the tax tips you need to get a jump on your returns.
Owning a home can pay off at tax time.
Take advantage of these home ownership-related tax deductions and strategies to lower your tax bill:
Mortgage Interest Deduction
One of the neatest deductions itemizing homeowners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can be a house, trailer, or boat, as long as you can sleep in it, cook in it, and it has a toilet.
Interest you pay on a mortgage of up to $1 million — or $500,000 if you’re married filing separately — is deductible when you use the loan to buy, build, or improve your home.
If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.
If you use loans secured by your home for other things — like sending your kid to college — you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.
Prepaid Interest Deduction
Prepaid interest (or points) you paid when you took out your mortgage is generally 100% deductible in the year you paid it along with other mortgage interest.
If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.
But if you refinance to get a better rate or shorten the length of your mortgage, or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the life of your mortgage. Say you refi into a 10-year mortgage and pay $3,000 in points. You can deduct $300 per year for 10 years.
So what happens if you refi again down the road?
Example: Three years after your first refi, you refinance again. Using the $3,000 in points scenario above, you’ll have deducted $900 ($300 x 3 years) so far. That leaves $2,400, which you can deduct in full the year you complete your second refi. If you paid points for the new loan, the process starts again; you can deduct the points over the life of the loan.
Home mortgage interest and points are reported on Schedule A of IRS Form 1040.
Your lender will send you a Form 1098 that lists the points you paid. If not, you should be able to find the amount listed on the HUD-1 settlement sheet you got when you closed the purchase of your home or your refinance closing.
Property Tax Deduction
You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.
If you bought a house this year, check your HUD-1 settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.
PMI and FHA Mortgage Insurance Premiums
You can deduct the cost of private mortgage insurance (PMI) as mortgage interest on Schedule A if you itemize your return. The change only applies to loans taken out in 2007 or later.
What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).
If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you can’t claim the deduction (10% x 10 = 100%).
Besides private mortgage insurance, there’s government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing, and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.
Vacation Home Tax Deductions
The rules on tax deductions for vacation homes are complicated. Do yourself a favor and keep good records about how and when you use your vacation home.
- If you’re the only one using your vacation home (you don’t rent it out for more than 14 days a year), you deduct mortgage interest and real estate taxes on Schedule A.
- Rent your vacation home out for more than 14 days and use it yourself fewer than 15 days (or 10% of total rental days, whichever is greater), and it’s treated like a rental property. Your expenses are deducted on Schedule E.
- Rent your home for part of the year and use it yourself for more than the greater of 14 days or 10% of the days you rent it and you have to keep track of income, expenses, and allocate them based on how often you used and how often you rented the house.
Homebuyer Tax Credit
This isn’t a deduction, but it’s important to keep track of if you claimed it in 2008.
There were federal first-time homebuyer tax credits in 2008, 2009, and 2010.
If you claimed the homebuyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest.
The IRS has a tool you can use to help figure out what you owe each year until it’s paid off. Or if the home stops being your main home, you may need to add the remaining unpaid credit amount to your income tax on your next tax return.
Generally, you don’t have to pay back the credit if you bought your home in 2009, 2010, or early 2011. The exception: You have to repay the full credit amount if you sold your house or stopped using it as primary residence within 36 months of the purchase date. Then you must repay it with your tax return for the year the home stopped being your principal residence.
The repayment rules are less rigorous for uniformed service members, Foreign Service workers, and intelligence community workers who got sent on extended duty at least 50 miles from their principal residence.
The Nonbusiness Energy Tax Credit lets you claim a credit for installing energy-efficient home systems. Tax credits are especially valuable because they let you offset what you owe the IRS dollar for dollar, in this case, for up to 10% of the amount you spent on certain upgrades.
The credit carries a lifetime cap of $500 (less for some products), so if you’ve used it in years past, you’ll have to subtract prior tax credits from that $500 limit. Lucky for you, there’s no cap on how much you’ll save on utility bills thanks to your energy-efficiency upgrades.
Among the upgrades that might qualify for the credit:
File IRS Form 5695 with your return.
Image: Liz Foreman for HouseLogic
ONLY 10 DAYS ON THE MARKET! SOLD
Congratulations Michael and Kit! Now lets find you a house to buy!
Start packing! This 2366 sqft home has 4 bedrooms 2 1/2 baths and is move in ready! Extremely well maintained, like new! Lots of extras added; Heat pump, shop, gas fire place and a extra large covered back patio area for your outdoor entertaining. Open floor plan, large bonus room upstairs. All on a fully fenced private corner lot with a shop in back! Enjoy living in an established residential neighborhood and still have a shop for your projects.
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7 Ideas to Help You Use Your Outdoor Space More
When your mom told you to turn off the TV and play outdoors already, she knew what she was talking about. Hanging outside is good for our mental and physical well-being.
As adults, having an outdoor retreat adds an economic component: Upwards of 80% of homebuyers said patios and front porches are “essential” or “desirable,” according to the “What Buyers Really Want” survey from the National Association of Home Builders (NAHB).
So how come when we move into our dream home, we hardly ever use our decks, porches, and patios?
An anthropological UCLA study, described in the book “Life at Home in the Twenty-First Century,” blames our fascination with digital devices — tablets, computers, televisions, games — for keeping us cooped up. The UCLA research participants spent less than half an hour each week in their outdoor space. And these were Californians.
So this summer let’s make a pledge to pay more than lip service to outdoor living so we can be happier, create lasting memories, and generally take advantage of what home has to offer.
1. Go Overboard on Comfy
When you step into your outdoor space, your first sensation should be ‘ahhhh’. If you’re not feeling it, then your space is likely lacking the comfy factor. Comfy is easy to achieve and can be as low cost as you want. Start simple with a cushion or two or even a throw. Some other simple strategies:
- Make sure your outdoor seating is as cushy as your indoor furniture. Today’s outdoor cushions aren’t the plastic-y, sweat-inducing pillows of the past. Plus, they can handle a downpour and spring back once they dry.
- Lay down outdoor rugs so you’re just as comfortable barefoot as you are inside.
- Give yourself some privacy. Create natural screens with shrubs, bushes, or even bamboo reeds. Or install prefab screens from your local home improvement store.
2. Create a Broadband Paradise
Our devices and electronics have conspired to keep us on lock down. Since we’re not about to chuck our digital toys, boot up your outdoor space so you can keep texting, posting to Instagram, and watching cat videos.
- Wireless outdoor Wi-Fi antennas provide an extra boost so you can stay connected.
- A solar USB charging station keeps your gizmos powered.
- Wireless speakers make it easy to bring your music outdoors, and mask a noisy neighborhood.
- An all-weather outdoor TV lets you stay outside for the big game.
3. Blur the Line Between Indoors and Out
Creating a seamless transition between your home’s interior and exterior isn’t as simple or low cost as adding comfort, but it’s the most dramatic and effective way to enhance your enjoyment of the space. Plus, it can increase your home’s value.
- The most straightforward, cost-effective solution: Replace a standard door opening with sliding or glass French doors.
- Use the same weatherproof flooring, such as stone tile or scored concrete, outside as well as in the room leading to your backyard oasis.
4. Light the Way
When the sun goes down, don’t be left groping for your wine glass. Outdoor lighting dresses up your home’s marketability and appeal (exterior lighting is buyers’ most wanted outdoor feature, according to the NAHB study), makes it safer, and lets you spend more time outside.
- Use uplighting to highlight trees, architectural details, or other focal points.
- Add sconces or pendant lights to make evening entertaining, grilling, and reading easier.
- Illuminate walkways, rails, and steps with landscape solar lights.
- Hang fairy or string lights to set an enchanting tone.
5. Make Your Mark
Let your style dominate your backyard space.
- Paint a faux rug with your favorite colors.
- Create a path made with colored glass, brick, or other interesting found materials.
- Craft a one-of-kind outdoor chandelier.
- Build a pizza oven, custom seating, or other feature you crave.
- Add personal décor that makes you happy.
In fact, make your outdoor retreat an ongoing project where you can hone your DIY skills.
6. Don’t Give Anyone an Excuse to Stay Inside
Your outdoor space will magnetically draw family and friends if it has features they find appealing.
- A fire pit is a proven winner. Food and fire have brought humans together since the dawn of time.
- Give wee ones the gift of magical thinking with an outdoor playhouse.
- Add whimsy with a chalkboard fence that both kids and fun-loving adults will enjoy.
- Add a doggie window in your fence to entertain Spot. Installing a dog run may even boost your home’s value. FYI: It’s been said that pets are one of the top reasons why people buy houses.
7. Rebuff the Elements
Hot sun, rain, wind gusts, and bugs are the archenemy of good times. Here are tips and strategies to help you throw shade on Mother Nature:
- Install an awning, canopy, or pergola. It’ll make it easier to read your Kindle or iPad and keep you dry during a summer shower. Look for products with polycarbonate panels, which block UV rays, too.
- Rig glass fence windscreens to the keep your BBQ fires burning.
- Screen in your porch or deck against bugs. But screening will be for naught if you forget the slats between wood planks. Cover the floor with outdoor carpet or staple screening to the underside of floorboard
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.
Photo by bluebay.
Stock photo – Image ID: 100313180
$195,000 | 3 BEDROOMS | 2 (2 full ) BATHROOMS | 1080 SQUARE FEET
Immaculate and well maintained! 3 bdrms 2 baths, an open floor plan and vaulted ceilings gives this home its spaciousness. Privacy and Wilderness! Located at the end of Oppelt Rd, this fully fenced 5 acre parcel is surrounded by 1000s + acres of Weyerhaeuser forest land. Outbuildings include a new 2 car garage and a full height RV storage shop, Detached extra building for hobbies or guests with a loft. Raised gardens and with a planting shed.
Photo by Stuart Miles - Image ID 100247789