Mobile Menu
Select Page

Buying a home in 2014? Tax Changes and Deductions That Could Dissapear

Are you paying for private mortgage insurance (PMI)?  In 2014, private mortgage deductions could disappear   For tax year 2013, you can treat qualified PMI premiums as home mortgage interest, but the deduction only applies if your adjusted gross income is no greater than $109,000, and it is available only for mortgages entered into between 2007 and 2013.  It is hard to determine what changes Congress may make in regards to the upcoming PMI deduction deadline.

Here are five reason why you’ll want to purchase a home in 2014, courtesy of Keeping Current Matters:

  1. Purchasing a home is a leveraged investment.  You’ll receive a return on your equity.
  2. When you rent, you’re paying your landlord’s mortgage.
  3. Homeownership helps people stop deferring savings to another day.
  4. Rent tends to go up higher than inflation.
  5. There are tax benefits.

The following was written by Rebecca D. Heaton, EA, RH Accounting Services, LLC:

What can you save on taxes if you buy a home in 2014?

Here’s an example:

A single taxpayer earns $70,000 annually.

Before he or she purchases a home:

The standard deduction taken is $6,200.

Tax liability is $11,000.

The taxpayer purchases a home in January for $250,000 with 20 percent down.  A 30 year mortgage for $200,000 at 4.5 percent is taken out.

After the purchased itemized deductions are:

Real estate taxes: $2,000

Mortgage interest:  $9,000

Charitable contributions: $2,000  (Spent by taxpayer to charities.  Previously left on table.)

General sales tax deduction: $924 (This deduction is based on wages earned and a calculated figure.  Previously left on table.)

Total itemized deduction for homeowner: $13,924

Tax liability: $9,100

Savings to taxpayer: $1,900  (That’s nearly 3 percent of the homeowner’s income.)

Factors vary from homeowner to homeowner.

Remember, with homeownership you are saving an estimated $2,000 in taxes as well as putting your money toward one day owning a property rather than having nothing to show when renting.

Remember also, do not spend more on a house just to be able to write more off.  Buy what makes sense. Live to work; don’t work to live.

*All amounts are based on estimated/rounded numbers.

Please follow and like us:
Facebook
Facebook
Twitter
Pinterest
Pinterest
Google+
Google+
http://thetamparealestateinsider.com/real-estate-news-info/buying-a-home-in-2014-tax-changes-and-deductions-that-could-dissapear/
LinkedIn
RSS

Written by Rae Catanese, Realtor

Licensed Realtor since 2002, Tampa Bay’s own Rae Catanese regularly gives expert advice and insider tips about the Tampa Bay real estate market via her blog, The Tampa Real Estate Insider. If you are thinking of buying or selling a home in the Tampa, St. Petersburg or Clearwater areas-then this blog is for you. I typically post articles once a week. To make sure you don’t miss my newest posts, you can subscribe here! Have a real estate question? Email me here!

View all author posts →

Submit a Comment

Your email address will not be published. Required fields are marked *