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Tax Deductions and Exemptions for your home

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Would you like to save $1,500 to $10,000 a year on taxes? If you like money, this video is for you.
In times of inflation, it is important to start looking where you can save money and your taxes are a great place to start looking now.

Hi my name is John Herman of PropertyUp and I have been just been awarded top 2% of real Estate Agents selling homes in the Northwest Suburbs of Chicago, and I would love to work with you.

Now here are some very helpful deductions you may not be aware of:

1.) Mortgage Points Deduction
The points you pay on a loan to buy, build or substantially improve your primary residence are fully deductible in the year you pay them.

2.) Premium Mortgage Insurance (PMI) Deduction
PMI is usually charged if you put down less than 20% when you buy a home. if you itemize your taxes, this can be deducted.

3.) Mortgage Interest Deduction
You can deduct interest on up to $750,000 of debt used to buy, build or substantially improve your primary home or a single second home. (For pre-2018 mortgages, interest on up to $1 million of debt is deductible.)

4.) Mortgage Interest Credit
In addition to the mortgage interest deduction, there’s also a mortgage interest tax credit available to lower-income homeowners who received a subsidy the purchase their home. The credit amount ranges from 10% to 50% of mortgage interest paid during the year.

5.) Home-Office Expense Deduction
If you’re self-employed and work at home, you might be able to deduct up to $1,500.

6.) Deduction of Medically Necessary Home Improvements
Let’s say you spend $50,000 to install an elevator, and that increases your home’s value by $40,000, you can deduct the $10,000 difference.

7.) Property Tax Deduction
You might be able to deduct the state and local property taxes you pay on your federal income tax return.

8.) Increased Basis When Selling Your Home
Your basis is what you paid for your home and improvements so the cost of additions and major home improvements can be added to the basis, too This does exclude basic repairs and maintenance costs.

9.) Capital Gain Exclusion When Selling Your Home
So if you owned a home and lived in it for at least two of the past five years, you don’t have to pay tax on either $250,000 to $500,000 depending on if you are married
So if you buy your home for $500,000 and sell for 1M, your gain is $500,000 and is tax-free.

10.) Investors: Deduction of Rental Expenses
You can deduct expenses for the rental space such as insurance, repair, general maintenance costs, real estate taxes, utilities, supplies, and more. You can also deduct depreciation on the part of your house used for rental purposes, and on any furniture or equipment in the rented space.

11.) Forgiveness of Debt on a Foreclosure or Short Sale
when it comes to mortgage debt forgiven as part of a foreclosure or short sale, up to $750,000 of discharged debt on a principal residence is tax-free

Ok that was the list of Deductions, here is a quick list of exemptions

General Homestead Exemption

Homestead Improvement Exemption

Long-time Occupant Homestead Exemption (LOHE) – Cook County Only

Homestead Exemption for Persons with Disabilities

Veterans with Disabilities Exemption for Specially-Adapted Housing

Standard Homestead Exemption for Veterans with Disabilities

Returning Veterans’ Homestead Exemption

Natural Disaster Homestead Exemption

Senior Citizens Homestead Exemption

Senior Citizens Assessment Freeze Homestead Exemption (SCAFHE)

Senior Citizens Real Estate Tax Deferral Program
Non-homestead Exemptions for Religious,
Charitable, or Educational Organizations

Now, these Deductions and exemptions are available for you today, sometimes the government changes these so I wanted to make you aware of this as well.

Thanks again for watching, please like and subscribe if you found this information helpful in any way and again my name is John Herman and remember, make it a great day!

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