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Real Estate Tax Breaks That Will Soon Expire
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January 4, 2017
Advice for Selling Your Home Early in 2017
January 16, 2017We have some good and bad news if you have been thinking about purchasing or making improvements to a home. The bad news is that there were several significant tax breaks at risk of expiring at the end of 2016. The good news is that Congress has the ability to approve extensions for certain credits. It is important to educate yourself about all of these tax deductions to understand which ones you may still be able to take advantage of, both old and new.
To offer you some insight, following are few tax breaks that were set to expire at the end of 2016.
- No more write offs for private mortgage insurance.
In 2014, Congress passed a bill that allowed qualified homeowners to get a tax break on the private mortgage insurance (PMI) they were paying on their homes. Many lenders required PMI in order to protect themselves if the buyer was unable to pay, so this tax deduction benefited a large number of homeowners. Unfortunately, this tax break was eliminated at the end of 2016. Homeowners can no longer write off the costs of their PMI.
- Say goodbye to mortgage debt forgiveness.
In many instances, homeowners were required to claim a forgiven debt on a home mortgage as taxable for federal income tax purposes. Implementation of the Mortgage Forgiveness Debt Relief Act made it possible for qualified homeowners, who lost their homes to foreclosure or were eligible for a repayment adjustment, to not have to claim the forgiven debt as income on their tax returns. While Congress has renewed this tax break several times, it was still set to end at the end of 2016. However, if your tax debt was created in 2016, you can still complete the process into 2017 without having to claim the forgiven debt.
- Credits for going green are ending.
In years past, homeowners have been able to claim some of the costs of installing energy-efficient upgrades in their homes. Qualifying improvements included appliances, HVAC equipment, insulation, windows, doors, roofing, and more. Unfortunately, this tax benefit was also slated to end in 2016.
To make up for the benefits you are losing, now is the time to start researching potential real estate tax breaks for 2017.
Shelly Henderson
Shelly calls herself a “Charlottean” because her family has been there since her elementary school days. She serves as Henderson Properties’ co-founder, along with her husband Phil, managing the day-to-day operations, social media branding and leadership development. Her different life experiences, both positive and challenging, earned the title to her first book Starting From Scratch. Shelly has a servant’s heart and leads her company with purpose and passion. She is mom to two sons who continue as young adults to make her heart swell.