APN News

  • Saturday, March, 2020| Today's Market | Current Time: 09:44:28
    1. Mortgage interest – For those closed on or before Dec. 15, 2017, joint filers can deduct mortgage interest on the first $1 million of debt. For loans closed after, joint filers can deduct it on the first $750,000 of mortgage debt. This amount is halved for single filers or married taxpayers filing separately.
    2. Home equity loan interest – Homeowners can no longer deduct interest for home equity debt – regardless of when that debt was incurred – unless the loan proceeds were used to acquire or improve the property.
    3. Property tax – If you itemize, you can deduct it – to a point. Your tax deduction maxes out at $10,000 for all state and local taxes, including property taxes. If your state income or sales tax deduction plus property tax exceeds $10,000, you won’t be able to deduct everything you paid. If you’re single or married filing jointly, that drops to $5,000.
    4. Home office – If a home office qualifies, taxpayers can deduct the cost of maintaining it on a Schedule C, E or F. There are two ways to calculate it: (1) deduct $5 per square foot for up to 300 square feet of dedicated (only used for work) office space or (2) add up the actual expenses of maintaining the space. Normally, you calculate the total household maintenance, including utilities, cleaning, repairs, mortgage interest (if not deducted on Schedule A), and then divide by the percentage of your home’s square footage allocated to your office.
    5. Rental – If you rent out part of your home, either to a long-term tenant or through a service like Airbnb, you can deduct the expenses related to that enterprise, up to the amount of rental income. For costs related to the entire home, you can partially deduct them.
    6. Mortgage closing costs – Yes and no. The fully-deductible costs are: sales taxes at closing, real estate taxes, mortgage interest paid at closing and loan origination fees calculated as a percentage of the loan amount (points). Homeowners can deduct points paid on a home improvement loan to improve the home in the year they closed on the loan, but they must prorate over time any points paid to refinance.
    7. Selling a home in 2019 – If you lived in your home for at least two of the last five years, you can exclude up to $500,000 ($250,000 if single or married filing separately) of the gain on your home sale from income taxes.