One of the foremost tax benefits of home-ownership is that the rental income that the home owners receive is not taxed. Following are few more tax benefits of home-ownership:
Mortgage Interest Deduction
Homeowners can reduce their taxable income by deducting the mortgage interest amount from their taxable income. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home.
Property Tax Deduction
Another important deduction that a taxpayer can make before paying the federal income tax is to deduct the property tax amount form their taxable income. That deduction is effectively a transfer of federal funds to jurisdictions that impose a property tax (mostly local but also some state governments), allowing them to raise property tax revenue at a lower cost to their constituents.
Effect of these homeowner deductions on State revenue
The Tax Policy Center (TPC) estimates that 20 percent of all tax units will benefit from the deduction in 2015. The congressional Joint Committee on Taxation (JCT) estimated that the mortgage interest deduction will cost the federal government almost $75 billion in lost revenue in fiscal year 2015. The JCT estimated that the property tax deduction saved millions of homeowners a total of $34 billion in income tax in fiscal year 2015.
What Tax Help MD offers?
At Tax Help MD you can get professional advice from our experts about methods of taking advantage of homeowner deductions. We make sure that your payable tax is reduced by utilizing the tax exemptions available.
My Tax Help MD is one of the reliable and professional tax resolution providing companies that serve in all kinds of IRS tax issues. Our professional team is able to consult you about the IRS tax process, can provide you IRS tax debt resolution, and can also guide you how to save money while paying your taxes.