Sherwood & Surrounding Area Real Estate with The Gardner Team

It's officially "Tax Day" and in spirit of April 15th we'd like to share some quick facts on how home ownership can reduce taxes.  Becoming a homeowner provides a great tax shelter.  Home ownership may lower your taxes and help you get a bigger refund, and here's how...

Courtesy of U.S. NEWS World Report

Tax credit: President Barack Obama's $787 billion economic stimulus package--which became law in mid February--included a tax credit designed to ramp up housing demand. The new law offers eligible first-time home buyers a tax credit worth up to $8,000 when they purchase a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009. The credit does not have to be paid back, but it's subject to income limitations. Under the terms of the legislation, a first-time home buyer is defined as anyone who has not had an ownership interest in a principal residence for three years before the transaction.

Property tax deduction for non-itemizers: A housing law enacted in July provided a perk for home owners who don't itemize their taxes. The move enables such taxpayers to claim an extra deduction in addition to the standard deduction for tax year 2008. Under the terms of the legislation, non-itemizing homeowners can deduct up to $500 of property taxes if they are filing individually, or up to $1,000 if they are filing jointly. "That will have a direct, dollar-for-dollar impact on some folks," says Linda Goold, the director of federal tax programs for the National Association of Realtors.

Energy efficient home improvements: The financial bailout package, which became law in October, expanded the scope of home improvements eligible for tax credits in 2008. The legislation enabled homeowners who had certain wind energy systems in place last year to qualify for tax credits worth 30 percent of the purchase and instillation cost, up to a maximum of $4,000. It also boosted the size of the tax credit available for installing geothermal heat pumps. In addition, home owners can qualify for similar credits on their 2008 taxes if they installed solar water heaters, fuel cells, or solar panels last year. While the savings for these energy efficient home improvements are limited for 2008, the recently-enacted economic stimulus package increased the benefits going forward.

Home office tax deduction: Homeowners who work from home may be eligible for additional tax savings. The Internal Revenue Service allows certain property owners who use a part of their home to conduct business to claim a home office deduction. In order to qualify, a portion of the house--say, a room--must be used exclusively and regularly as a principal place of business or as a location to interact with customers. A room that is regularly used for some types of storage, as a day care facility, or as rental property may qualify as well. The value of the deduction will depend on the size of the space used. But those considering claiming this deduction should proceed with caution, as IRS auditors are on the lookout for its abuse. To avoid problems, homeowners that claim the home office deduction need to keep very careful records and to make an assessment of factually why they think they are justified in taking it.

Moving expenses: In certain cases, homeowners who move from one location to another on account of a job can deduct the moving expenses from their taxes. In order to do so, the new job must be located 50 or more miles further away from the previous home than the distance between the previous job location and the previous home. (For example, if your previous job was located five miles away from your old home, your new job location would have to be at least 55 miles away from your previous home.) Employees will also have to work full-time for a minimum of 39 weeks within the first year in the general vicinity of the new location to qualify for the credit. "It's a statutory adjustment," says Robert Dietz, the director of tax issues for the National Association of Home Builders, "which means...it's a deduction you can claim regardless of itemization." You do not, however, need to be a homeowner to take advantage of this tax benefit. Becoming a homeowner could save more or get more money back at tax time!

Getting great real estate representation for FREE:  Did you know that buyers don't pay the real estate agent?  That's right, as a home buyer you don't pay anything.  The sellers pay the Realtors.  As you can see, having a skilled professional represent you in the purchase of your home proves not only to be extremely helpful, it will save you time and money as well.

When it comes to homeownership news you can use, keep visiting this blog www.DiscoverSherwood.com, our personal real estate website at www.TheGardnerTeam.net and coming soon our dedicated home buyer site www.FirstTimeHomeBuyerTeam.com - Whether you're considering buying, selling or both, our expert advice is always free. 

For more information on becoming a homeowner or a first-time homeowner, our first time home buyer team has the answers.  We're committed to helping you discover a better home buying experience and educating you on the variety of programs available to help buyers purchase a home of their own in Sherwood Oregon and the surrounding areas... You can ALWAYS reach us directly by calling Jason Gardner at 971-832-1234 or sending an email to jasongardner@johnlscott.com  

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