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Homeowners enjoy a variety of tax breaks.

Categories: Home Ownership, Tips | Posted: April 15, 2015

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With tax season upon us, it’s a good idea to remind new (and potential) homeowners that in addition to the joy of owning your own home, you also inherit new tax considerations. The good news is you can deduct many home-related expenses. These tax breaks are available for any abode, whether single-family home, townhouse or condominium. The bad news is your taxes will get more complicated. In most cases, homeowners itemize. That means you move to Form 1040 and Schedule A, where you’ll have to detail your tax-deductible expenses.

If you do find that itemizing is best for your tax situation, here’s a look at homeowner expenses you can deduct on Schedule A.

  1. Mortgage interest

Your biggest tax break is reflected in the house payment you make each month since, for most homeowners, the bulk of that check goes toward interest. And all that interest is deductible, unless your loan is more than $1 million. Interest tax breaks don’t end with your home’s first mortgage. Did you pull out extra cash through refinancing? Or did you decide instead to get a home equity loan or line of credit? Generally, equity debts of $100,000 or less are fully deductible.

  1. Points

Did you pay points to get a better rate on any of your various home loans? They offer a tax break, too. The only issue is exactly when you get to claim them. The IRS lets you deduct points in the year you paid them if, among other things, the loan is to purchase or build your main home, payment of points is an established business practice in your area and the points were within the usual range. Make sure your loan meets all the qualification requirements so that you can deduct points all at once.

  1. Taxes

The other major deduction in connection with your home is property taxes.

A big part of most monthly loan payments is taxes, which go into an escrow account for payment once a year. This amount should be included on the annual statement you get from your lender, along with your loan interest information. These taxes will be an annual deduction as long as you own your home. If this is your first tax year in your house, dig out the settlement sheet you got at closing to find additional tax payment data. When the property was transferred from the seller to you, the year’s tax payments were divided so that each of you paid the taxes for that portion of the tax year during which you owned the home. Your share of these taxes is fully deductible.

  1. Home improvements

Save receipts and records for all improvements you make to your home, such as landscaping, storm windows, fences, a new energy-efficient furnace and any additions. You can’t deduct these expenses now, but when you sell your home the cost of the improvements is added to the purchase price of your home to determine the cost basis in your home for tax purposes. Although most home-sale profit is now tax-free, it’s possible for the IRS to demand part of your profit when you sell. Keeping track of your cost basis will help limit the potential tax bill.

  1. Energy credits

Some energy-saving home improvements can earn you an additional tax break in the form of an energy tax credit worth up to $500. A tax credit is more valuable than a tax deduction because a credit reduces your tax bill dollar-for-dollar. You can get a credit for up to 10% of the cost of qualifying energy-efficient skylights, outside doors and windows, insulation systems, and roofs, as well as qualifying central air conditioners, heat pumps, furnaces, water heaters, and water boilers. There is a completely separate credit equal to 30% of the cost of more expensive and exotic energy-efficient equipment, including qualifying solar-powered generators and water heaters. In most cases there is no dollar cap on this credit.

What’s not tax deductible

While many tax breaks are available to a homeowner, there are a few things for which you have to bear the full cost.

  • Private mortgage insurance, or PMI, is a cost you probably won’t be able to deduct, unless you meet the requirements of a special PMI law.
  • Property hazard insurance premiums remain non-deductible, even though the coverage generally is required as part of the home loan and is included as a portion of your monthly payment.
  • Homeowners association dues, any additional principal payments you make, depreciation of your home, and general closing costs and local assessments to increase the value of your neighborhood, such as construction of new sidewalks or utility connections, are non-deductible.

Ivey Homes is a leading new home builder in Augusta, GA, with home pricing ranging from the $140,000’s to Custom. For more information about living in or building a new home in Columbia County, Richmond County or Augusta, visit iveyhomes.com! Drop us a line with feedback or questions. Don’t forget to check out our Facebook page, too!

Masters Week 2015: Top 5 Things to Do in Augusta

Categories: Local Events | Posted: March 26, 2015

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Augusta residents rent out their homes and kids are on Spring Break so most locals head to the hills (aka the beach or Disney World) come the first full week in April, globally known as Masters Week. While the whole world descends on our mid-sized Southern city where golf patrons pay unspeakable prices to visit with big dreams of landing a “golden ticket” to the Masters Tournament.

Some locals, like myself, have another take on Masters Week. Augusta spares no expense to show visitors how great the town is and I take full advantage! Here are my top 5 to dos if you are in Augusta for Masters Week 2015.

  1. Hands down #1 is the 11th Annual Rock for Dough Concert Tuesday, April 7th. Outdoor venue, Evans Town Park, and live music. All for a good cause benefiting The First Tee of Augusta. Tickets go fast at $30-$35. This year Darius Rucker returns to headline with added performances by country star Sam Hunt.
  2. Find my friends at SouthStar Trolley (706-432-8883) for their Augusta Golf Heritage Trolley Tour. Tour historic sites that helped transformed Augusta into the golf capital of the world. They are wanna-be comedians too so it’s always a fun ride.
  3. Must do lunch is Honey for the Rock Café, conveniently located across the street from the Augusta National. Hours are tight this gem is only opened Monday – Friday from 11am-2pm, but well worth the effort. Think southern cooking like roast beef and gravy, fried okra and cornbread. Mmmm, that makes me hungry…
  4. First Friday is held the first Friday of every month in Downtown Augusta. Stroll through art galleries and watch street performers and listen to live music. Finish it off with dinner at Craft & Vine, a throwback to a laid back “speak-easy” where the velvet rope and red carpet are always out. Try my favorite from the bar the Zelda Fitzgerald or have a pick from a wide variety of craft beers. Reservations are recommended, but the wait is even cool at this joint!
  5. Last but not least, the place to be and be seen Masters Week in Augusta has to be Surrey Center. This upscale shopping plaza off Berkman Road (yep that Berkman) plays host to the who’s who of Augusta visitors. Plan to dine at French Market or Oliviana’s, then walk across the parking lot to Surrey Tavern for a cocktail and live music! This place overflows with golf patrons and is a must experience while in Augusta!

Ivey Homes is a leading new home builder in Augusta, GA, with home pricing ranging from the $140,000’s to Custom. For more information about living in or building a new home in Columbia County, Richmond County or Augusta, visit iveyhomes.com! Drop us a line with feedback or questions. Don’t forget to check out our Facebook page, too!

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