With the federal and state tax deadlines pushed to Monday, May 17, I wanted to highlight a few tax code items associated with real estate and housing.
RENTERS: I feel for renters who are looking to buy in this competitive market. Rent paid cannot be deducted from taxes, which is why home ownership is a cornerstone of financial stability. However, if renters have a home office, they may be able to deduct expenses just as a homeowner would. Also, if they meet certain requirements, Maine offers a Property Tax Fairness Credit. Visit maine.gov/revenue to learn more.
HOMEOWNERS: In addition to the presumed rent that homeownership saves, most homeowners are able to write off all of the interest paid on a mortgage along with their property taxes. If they borrowed from a Home Equity Line of Credit and used the money on repairs or improvements on the same property, they will be able to deduct the interest from that loan as well.
HOME SELLERS: Under current tax code, when they sell their homes, a single filer is able to write off $250,000 of capital gains and a married couple filing jointly can write off up to $500,000 of capital gains. In this market, with multiple offer situations, those numbers are not as out of reach as some potential home sellers might imagine for their property. Every day of this past year has surprised me. The old saying “No better time than now” has only become wiser.
Want to get excited to do your 2021 taxes next spring? We love where we live, and Julia and I can help you buy or sell a home here too. We’d love to talk to you about your plans, no matter what stage they are in. Call 207-838-1651 or send us an email at ranellogroup@homesinmaine.com.
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