All of us in the business of real estate have been talking about the Mortgage Debt Relief Act being extended. (READ MORE ABOUT THAT HERE) But there are a few other key points that have an effect as well.
Here are some highlights I thought worth mentioning:
1. DEDUCTION OF MORTGAGE INSURANCE PREMIUMS
If you have an adjusted gross income of below $110,000, and pay private mortgage insurance premiums or guarantee fees on conventional, low down payment home loans, FHA, VA and Rural Housing mortgages, you will be able to write off those premiums along with their mortgage interest on federal tax returns. This is retroactive to cover all of 2012 through 2013.
2. TAX CREDITS FOR ENERGY-EFFICIENCY HOME IMPROVEMENTS
Things like new windows, insulation and other energy saving upgrades can provide a modest tax credit of $200 to $500.
3. TAX CREDITS FOR NEW ENERGY-EFFICIENT NEW HOUSES
As with other energy-related tax provisions, this had expired last year and will now be continued through 2013. Builders and contractors building new homes meeting federally specified energy-conservation standards are allowed to claim a $2000 tax credit
So…what is the downside? Well…unless you are in the highest income brackets…not much. But if you earn $400,000 or more as a single filer or $450,000 as a joint filer, your new marginal federal tax rate is 39.6 percent. AND…you will also get slammed with a 20 percent rate on long-term capital gains…like those from investment real estate and home sales that show gains beyond the $250,000/$500,000 thresholds.
Well…no matter what side of the isle you like…it is not over. This entire fiasco…in my opinion…is a band aid. All these issues will rise again this spring and summer, when more debates over the tax code get under way. Once that process starts, OH MY: Home real estate tax issues WILL be on the chopping block.
YOU are supposed to be the BOSS of our representatives. Do you call, fax, text and email them with your opinions? No? Why not? Housing is EVERYONES issue!!!
As always… if you are looking for a GREAT agent to help with your real estate needs please e-mail me at Adele@GreaterPhoenixHomes.com or give me a call (or text) at 602-504-3898 or 888-897-7821 x 114. Plus, I have a GREAT search tool on my web site that gives you the ability to search the entire MLS…just like agents do. Very COOL! Go to Metro Phoenix Homes For Sale and check it out! YOU can create and save as many searches as you would like…and it is THE SAME SEARCH I DO AS AN AGENT! You will LOVE it!