Tax season is upon us. Are you hoping for a big break on your tax return? As you prepare your 2023 taxes, here are a few housing-related items to keep in mind.
Home interest deductions.
- Mortgages that closed before Dec. 16, 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. 16, 2017: For both primary residences and second home loans, married couples filing jointly and single filers can deduct mortgage interest on a combined debt limit of $750,000.
Property tax deductions.
Taxpayers who itemize can deduct up to $10,000 as a married couple filing jointly or $5,000 for those who are single or married, filing separately 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.
Residential energy credits.
Certain home improvements, such as energy-efficient windows, doors, solar panels and HVAC systems may be eligible for tax credits. Check IRS guidelines to determine how much you can claim as a credit.
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.
To stay updated on what’s happening in your market, or for professional guidance through the process of buying or selling a home, contact your Long & Foster real estate agent.
*This information is not intended to be and does not constitute financial or investment advice.