2008 Tax Deductions For Mobile Eastern Shore Home Owners
Mobile Eastern Shore home owners can get various income tax deductions on their principal residence or second home, such as mortgage interest, property taxes, and in some cases, for Private Mortgage Insurance. Read the 2008 guidelines from Turbo Tax:
You can deduct:
- Your property taxes. And if you bought the home in 2008, you may be able to deduct more than you think. Don’t forget to include real estate taxes you reimbursed the seller for – taxes the seller had already paid for the time you actually owned the place after your purchase. That amount will be shown on the settlement sheet.
- Property taxes for taxpayers who don’t itemize. New for tax year 2008, if you do not itemize deductions for 2008, you can increase your standard deduction by up to $500 of real estate taxes paid in 2008 if you file as a single person, or by up to $1,000 of property taxes paid if you file jointly.
- The mortgage interest on your primary residence, as well as any secondary residence you own. (There are limits, but relatively few taxpayers are affected.)
- The interest on up to $100,000 borrowed on a home-equity loan or home-equity line of credit, regardless of the reason for the loan.
- Points that you paid when you purchased the house (or those that you convinced the seller to pay for you).
- The premiums paid for Private Mortgage Insurance (PMI) in 2008, but only for policies issued after 2006. (The right to this deduction disappears as Adjusted Gross Income rises from $100,000 to $110,000 on a joint return, and from $50,000 to $55,000 on a single return.)
- Home improvements required for medical care.
How much can I save?
The actual amount of money you save on your annual income tax bill depends on a variety of factors
- Your filing status (single, head of household, married filing jointly, married filing separately)
- Your standard deduction amount
- Your other itemized deductions
- Your taxable income
Your home-related deductions, plus your other itemized deductions must add up to more than the standard deduction (increased by the amount of property taxes noted earlier that are allowed to non-itemizers), or they won’t save you any money.
What can’t I deduct?
- You can’t deduct the following payments for your primary residence
- Dues to a homeowners association
- Insurance on your home
- Appraisal fees for your home
- The cost of improvements to your home. (But keep those receipts. They may help you reduce your taxes when you sell your home.)
Learn more about Mobile eastern Shore home ownership by visiting JudySells.com.
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Important Provisions:
- It is a tax credit to home buyers, not a loan as in last year’s program;
- It is only for first time home buyers, defined as someone who has not had an ownership interest in a principle residence in the 3 year period prior to the date of the 2009 purchase;
- The buyer must remain in the home for a minimum of 3 years;
- It is applicable to purchases between January 1, 2009 and December 1, 2009; and
- Full credit is available to those with adjusted gross income of $75,000 or less ($150,000 for married filing jointly). The credit is phased out entirely for those with adjusted gross income over $95,000 ($170,000 for married filing jointly).
If you bought a home last year under the old $7,500 tax credit rules, those rules still apply to your 2008 home purchase.
If you purchased a home after January 1, 2009, or are thinking of buying a Mobile Eastern Shore home this year and want to learn more about the $8,000 tax credit, give me a call or visit JudySells.com.
Issues you will want to consider are the definition of adjusted gross income, how to apply for the credit, what happens if your total tax liability is less than the credit, definition of ‘principle residence’, and other issues. I am happy to advise you as to how you can benefit from the tax credit.
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Judy Niemeyer of Ashurst and Niemeyer presents:
