?? Tax Write-Offs and Information for Home Buyers and Sellers in 2024 ??

Buying or selling a home is one of the most significant financial transactions many people will make, and it comes with important tax implications. Whether you purchased a new home or sold your property in 2024, understanding what deductions and tax benefits are available can help you maximize your savings. Here’s what you need to know when filing your 2024 taxes. ????

For Home Buyers ??

If you bought a home in 2024, you may be eligible for several tax benefits. While the tax laws change periodically, here are some key deductions and credits to keep in mind:

1. Mortgage Interest Deduction ??

Homeowners who took out a mortgage in 2024 can deduct interest paid on loans up to $750,000 (or $375,000 for married couples filing separately). This applies to first and second homes. Keep your Form 1098 from your lender, which details your mortgage interest paid. ??

2. Property Tax Deduction ???

You can deduct up to $10,000 ($5,000 if married filing separately) in state and local property taxes. This cap includes both property and income taxes. ??

3. Mortgage Points Deduction ??

If you paid points to lower your mortgage rate, those points may be deductible in the year of purchase, or they may need to be spread over the life of the loan. Be sure to check with a tax professional. ??

4. Energy-Efficient Home Improvements ??

If you made qualifying energy-efficient upgrades, such as installing solar panels, energy-efficient windows, or HVAC systems, you may be eligible for tax credits. The Inflation Reduction Act extended and expanded these credits. ????

5. First-Time Homebuyer Assistance ??

While no federal first-time homebuyer tax credit exists in 2024, some state and local governments offer incentives or tax breaks. Be sure to research state-specific programs. ??

For Home Sellers ????

Selling a home in 2024 also comes with tax considerations. Here are some deductions and exemptions to be aware of:

1. Capital Gains Tax Exclusion ????

If you sold your primary residence and lived in it for at least two of the last five years, you may exclude up to $250,000 ($500,000 for married couples) of capital gains from taxation. Any profit exceeding these limits is subject to capital gains tax. ??

2. Selling Costs Deduction ??

Expenses related to selling your home, such as real estate commissions, title insurance, legal fees, and marketing costs, may be deductible from your capital gain. ??

3. Home Improvements and Repairs ???

Certain home improvements made to increase the home’s value may reduce your taxable gain when selling. However, general repairs and maintenance are not deductible. ??

4. Moving Expense Deduction (Limited Cases) ??

Although moving expenses are no longer deductible for most taxpayers, active-duty military personnel moving due to a military order may still claim this deduction. ????

Additional Considerations ??

• 1099-S Form ??: If your home sale profit exceeds the capital gains exclusion, you will receive a Form 1099-S from your closing agent and must report it to the IRS.
• Record Keeping ???: Keep all documentation related to your home purchase, sale, and improvements for at least three years after filing your tax return.
• State-Specific Deductions ??: Some states offer additional tax breaks for home buyers and sellers. Check with your state tax agency for details.

Final Thoughts ??

Understanding the tax benefits available when buying or selling a home in 2024 can help you maximize savings and avoid unnecessary tax burdens. Because tax laws are complex and subject to change, consulting with a tax professional or CPA is always a good idea to ensure you’re taking full advantage of available deductions and credits. ????

By staying informed, you can make the most of your home purchase or sale from a tax perspective! ????

Whether buying, selling, or seeking valuable insights into the market, I'm here to be your trusted guide in the dynamic world of real estate. Feel free to contact me for a confidential discussion, where we can explore your goals, address any questions, and navigate the exciting path of real estate together. Your real estate journey is unique, and I am committed to providing personalized assistance tailored to your needs. Don't hesitate to connect.