Tax season is upon us and, this year, the filing deadline is April 18. The deadline was pushed back from April 15 because of Emancipation Day, which is a holiday in Washington, D.C. As you prepare your 2021 taxes, here are a few housing-related items to keep in mind.
Home interest deductions
· Mortgages that closed before Dec. 14, 2017: A married couple filing jointly and single filers can deduct mortgage interest on a combined debt limit of $1 million.
· Mortgages that closed after Dec. 14, 2017: For both primary residences and second home loans, mortgage interest can be deducted on a combined debt limit of $750,000.
Property tax deductions
Taxpayers who itemize can only deduct up to $10,000 on a combination of state and local property, income and sales taxes. This applies to property taxes on your primary residence, a vacation home and undeveloped land.
Capital gains tax exclusions
Married-joint filers can exclude up to $500,000 and single filers can exclude up to $250,000 when selling their primary home, provided they’ve lived there two of the past five years.
Those are just a few of the housing-related tax laws. Please consult your tax advisor for more information on how these and other tax deductions may apply to you.
If you have any real estate-related questions, please feel free to contact me. I look forward to helping you with your future real estate needs.
*The information contained in this article is not intended to be and does not constitute financial or investment advice.