Tax Benefits for Homeowners in the Fed Gov Budget for 2016

Homeowners and mortgage borrowers also count as special interests on Capitol Hill, and this year’s Christmas tree is sprinkled with tax benefits for them as well. Some could even lower your next tax bill.

Home improvements you made during the past year that conserve energy, such as putting in new insulation, more efficient windows or an exterior door. You may be eligible for a 10 percent tax credit on their cost, up to a maximum credit of $500. Tax credits come directly off your bottom-line federal tax bill, so a $500 credit is more valuable than a $500 deduction, which is tied to your marginal tax bracket.

The federal budget bill that Congress passed along with the extenders legislation also reauthorized the biggest home energy-efficiency tax subsidy of all: the 30 percent credit for installing “renewable energy” improvements such as solar panels and wind and geothermal equipment. There is no dollar limit on what you can claim as a credit on these improvements, but the equipment must be purchased by you outright and installed on your principal residence. If you don’t own the solar panels on your roof, you don’t qualify for the credit.

Another key extension in the tax bill: Deductions for mortgage-insurance premium payments. Millions of home buyers who make down payments of less than 20 percent are charged mortgage insurance premiums or guaranty fees, whether for conventional loans (those eligible for sale to Fannie Mae or Freddie Mac) or government-backed Federal Housing Administration (FHA), Veterans Affairs (VA) or Rural Housing loans backed by the Agriculture Department.

Read more at: https://www.washingtonpost.com/realestate/classic-christmas-tree-bill-has-goodies-for-ordinary-homeowners/2015/12/21/ee9c140c-a810-11e5-9b92-dea7cd4b1a4d_story.html?hpid=hp_hp-cards_hp-card-realestate%3Ahomepage%2Fcard

Disclaimer: for information and entertainment purposes only

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s