It has now been nearly a year since the Covid-19 pandemic began and changed the ways we live, work, and play. Although tax filing deadlines were extended last year due to the pandemic, this year, the deadline will be back to its usual April 15 date. As you prepare your 2020 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. You should consult your tax advisor for more information on how these and other tax deductions may apply to you individually.
If you have any real estate-related questions, please feel free to contact me. Whether you are looking to buy, sell, or invest in real estate in 2021, I can help you and look forward to helping you with your future Philadelphia Main Line real estate needs. Looking to buy a home? Call me – I can help you find your dream home.
*The information contained in this posting is not intended to be and does not constitute financial or investment advice.