March 18th, 2011 12:04 PM by Eileen Denhard
RISMEDIA, March 16, 2011—With a little more than one month before income taxes are due, many of the nation’s 75 million homeowners may be appreciating the value of homeownership just a bit more as they take advantage of the tax benefits of homeownership.
“Owning a home offers myriad benefits throughout the year, but some of the financial advantages of homeownership are most apparent at tax time,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.
“As many of today’s hard-working American families are feeling a financial squeeze, the tax benefits that can come from owning a home can be a welcome relief.”
A number of tax deductions and credits are still available for homeowners; these include deductions—with specific limits—for mortgage interest and capital gains on home sales, and credits for certain energy-efficient home improvements. Even with these benefits, homeowners pay 80-90% of all U.S. federal income taxes.
“It’s been suggested that many of today’s tax incentives for homeownership primarily benefit wealthy individuals, but that’s simply not true,” said Phipps. “As today’s public debate continues about what homeownership means for families, communities, and the nation’s economy, there’s no question that for many, owning a home is still the best way to begin building wealth.”
Ninety-one percent of homeowners who claim the mortgage interest deduction earn less than $200,000 a year, and the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home in 2010 with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5%, could save nearly $3,500 in federal taxes when they file this year.
“REALTORS® see the very real positive impact of homeownership every day with our clients,” said Phipps. “Recent proposals to reduce or eliminate the mortgage interest deduction and remove government support of the housing finance market could have disastrous consequences for the economy, not to mention making it harder or nearly impossible for millions of families to own their own homes. We believe America must continue to invest in homeownership, for the future of our families and our nation.”
For homeowner tax season tips, visit www.HouseLogic.com. HouseLogic is a free source of information from NAR that helps homeowners maintain and enhance the value of their homes and engage in issues that affect their local communities.