Tax Time… 

There are a total of 923 residential homes available in the towns in our Lakes Region of NH list. That is up just slightly from last month and represents about 16.5 months worth of inventory currently on the market.

February is a good time to get started on your tax return if you haven’t already. There’s not a lot to do on weekends now that the Super Bowl is over. Patriots fans should have had their returns done several weeks ago but sometimes it just takes awhile to get back to a normal life. If you are a homeowner, particularly a new one, you need to know that there are a number of deductions that you can take on your taxes that help offset the many other joys of homeownership that you will encounter in the coming year. You can Google “Publication 530″ to see the IRS explanation of the deductions allowed as well as a number of other sites that actually explain it all in English.

Your home offers you some giant tax deductions so make sure you take advantage of them. The two big ones that stand out are property taxes and mortgage interest. We are blessed with high property taxes here in NH (I am kidding) and there is little doubt that interest is the bulk of your mortgage payment so these two are the biggies. But if you just bought your house in the last year you can also deduct any points you paid to get that reduced interest rate and also be sure to deduct the pro-rated taxes that you paid that appear on the settlement statement you received at your closing. If you are paying PMI, Private Mortgage Insurance, you can also now deduct that as well but the policy has to be issued after Dec 20, 2006. Interest on that home equity loan that you took out is also deductible even if you used the funds to buy that new boat or a two month vacation in Hawaii. Interest on mortgages for second homes is also deductible but we’ll worry about that when we can actually afford to buy one! But did you know that that second home could be a RV or a boat as long as it has sleeping, cooking, and bathroom facilities. Bob houses don’t count.

If you sold your home, costs associated with the sale such as real estate commissions, title insurance, and legal fees are all deductible from any taxable gain you might have. Perhaps the biggest wealth builder related to owning and selling a home is the capital gains exclusion. This allows you to keep, tax free, any profits on the sale of your primary residence up to $250,000 if you are single or up to $500,000 if you are married. Make sure you keep records of all real improvements you made over the years as these are added to you cost basis so they can be deducted from your profit. Don’t confuse home improvements with home repairs and maintenance which are not deductible. You must have lived in the residence at least two of the past five years and you can only take advantage of the capital gains exclusion once every two years. But what a deal!

You can claim other tax reductions for having an office in your home if you meet certain requirements. Your office must be used regularly and exclusively for business purposes and be your principal place of business where you meet with clients and customers. Be careful with this one. Be sure to consult with a good accountant or tax preparer on anything you have questions on.

Residential Homes Available February 1, 2009

Report covers the towns of Aton, Barnstead, Belmont, Center Harbor, Gilford, Gilmanton, Laconia, Meredith, Moultonborough, New Hampton, Sanbornton, and Tilton

This entry was posted on Wednesday, February 4th, 2009 at 12:46 pm and is filed under Lakes Region Home, Market Report Posts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.