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Editorial


Front Page - Friday, March 11, 2016

Homeowners can save this tax season


REALTOR Association President's Message



Nathan Walldorf

As the deadline to file taxes approaches, I want to remind homeowners of the many tax benefits, savings, and deductions they can take advantage of.

There are many social and personal benefits of owning a home, but some of the most significant financial benefits only become apparent at tax time. Many new homeowners, and even those who have owned their home for years, might be unaware of some of the fantastic tax breaks that come with owning a home.

Here are some deductions, credits, and tips of which many homeowners might not be aware:

Mortgage interest deduction: If you took out a loan to pay for your primary or a secondary home, you can deduct the interest paid on your mortgage up to $1 million. These savings can add up very quickly.

Property tax deductions: A large part of a homeowner’s monthly loan payments is taxes, which can be deducted annually. If you bought your home during this tax year, remember to pull out the settlement sheet you received at closing for more tax deduction data. When you purchased the property from the seller, the year’s tax payments were divided so that you were responsible for paying the taxes during the portion the year you owned the home; and your share of those taxes is deductible.

Energy efficiency tax credit: This provision allows homeowners to claim a tax credit (or a dollar-for-dollar reduction in taxes) of up to 10 percent of the amount spent, up to $500, for many green improvements done to their home that year. If you installed energy-efficient windows or solar panels in your home, make sure that’s reflected in your tax returns.

Home improvements: When it comes to taxes, home improvement expenses are not something homeowners can generally deduct on their taxes. However, improvements done to meet a medical need can be deducted. If you installed a wheelchair ramp or added handrails, you can deduct these projects as medical expenses. Still, you cannot deduct the entire cost of the equipment or renovation, only the amount left over when the added value to the home is subtracted from the cost of the improvement. Also, be prepared to document that the improvement was medically necessary by having at least one letter from a physician stating the need.

Contact the Association directly or connect with us on social media (Facebook, Twitter, LinkedIn, and YouTube) to find a Realtor and to learn more about homeownership and its tax breaks.

The Greater Chattanooga Association of Realtors is “The Voice of Real Estate in Greater Chattanooga.” The Association is a regional organization with more than 1,500 members, and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. The Greater Chattanooga Association of Realtors services Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, visit www.gcar.net.