Real Estate Deductions & Credits That Qualify:
If you purchased a home in 2018, were you aware that some tax deductions disappeared and do you know what drives property taxes to increase?
Crew member, Kristen Swartz, says:
“Property Taxes will often increase when improvements are made to the home, such as an addition or garage. Also, if there is a general rise in the value of the community or neighborhood homes, this can increase the property taxes. Another factor that can increase property taxes is the local school systems and their need for funding, whether it be to support the existing schools or the growing need for additional services and infrastructure.”
The unlimited state and local tax deductions are now capped at $10,000, which has impacted our above-average state income tax area. SALT has affected the middle class taxpayers the most, but the increased standard deduction will help soften the blow.
When purchasing a home, fees that cannot be deductible include title insurance, appraisal, abstract fees, recording fees, & surveys. Moving expenses have been eliminated for virtually all workers. We are under the notion that it may still apply to military families that are required to move.
Credits that still qualify would be:
We asked Kristen her thoughts on if the homestead credit is really worth it and the the maximum was. She says:
“Yes, it’s absolutely worth it! The credit will limit how much the property tax assessment can increase each year on a homeowner’s principal or primary residence. The assessment increase is capped to 10% or less each year. Any increase above the allotted amount would be a considered a tax credit. This allows more money in your pocket every year!” –D&C Crew Member, Kristen Swartz