Possible Real Estate Tax Deductions for 2016

Real Estate Tax DeductionsAs a potential homeowner, know your tax burden for 2016!

While the festivities are upon us and the holiday party season is in full swing, the last topic on your mind is probably the taxes! However, it’s well worth paying attention to real estate tax deductions now so that you can save later.

If you currently own a home or hoping to close on a home, your tax picture for 2016 may look different than it did previously! Take a peek at why:

  • Mortgage debt forgiveness
    When a mortgage lender writes off all or any part of a forgiven debt, the amount that is forgiven is “passed back” to the borrower as taxable for federal income tax purposes. The rule applies to all debt, including home mortgages.
  • Tax credit for residential energy-efficiency improvements
    Energy-efficient home improvement tax credits of up to $500 are available for the installation of qualified insulation, windows, doors, and roofs, as well as certain water heaters and qualified heating and air-conditioning systems.
  • Deduction for state and local general sales taxes
    In 2015, taxpayers could deduct state and local general sales taxes paid in 2015, rather than state and local income taxes. Congress may extend the break through the next year.
  • Deduction for mortgage insurance premiums
    You can deduct your property taxes from your gross income to reduce your overall taxable income.

If you’re feeling overwhelmed with the tax information, be sure to talk with a professional about your opportunity to save on your mortgage! Contact Avis Lending, serving all of Irvine, California and Lahaina, Hawaii with West Coast mortgage needs and concerns!

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