Tax Return Depressing? Owning a Home Could Help

Many Americans got some depressing news this week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home.

According to the Tax Policy Center’s Briefing Book -“A citizen’s guide to the fascinating (though often complex) elements of the federal Tax System” – there are several tax advantages to homeownership.

Here are four items, and a quote on each, from the Briefing Book:

1. Mortgage Interest Deduction

“Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayers who do not own their home have no comparable ability to deduct interest paid on debt incurred to purchase goods and services.”

2. Property Tax Deduction

“Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”

3. Imputed Rent

“Buying a home is an investment, part of the returns from which is the opportunity to live in the home rent-free. Unlike returns from other investments, the return on homeownership—what economists call “imputed rent”—is excluded from taxable income. In contrast, landlords must count as income the rent they receive, and renters may not deduct the rent they pay. A homeowner is effectively both landlord and renter, but the tax code treats homeowners the same as renters while ignoring their simultaneous role as their own landlords.”

4. Profits from Home Sales

“Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale. But homeowners may exclude from taxable income up to $250,000 ($500,000 for joint filers) of capital gains on the sale of their home if they satisfy certain criteria: they must have maintained the home as their principal residence in two out of the preceding five years, and they generally may not have claimed the capital gains exclusion for the sale of another home during the previous two years.”

Bottom Line

We are not suggesting that you purchase a house just to save on your taxes. However, if you have been on the fence as to whether 2017 is the year you should become a homeowner, this information might help with that decision.

Disclaimer: Always check with your accountant to find out what tax advantages apply to you in your area. 

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5258 E Calle De La Fressa -- Hereford, AZ 85615

$465,000

4 Beds

2 Baths

1,928 SqFt

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A must see to appreciate is the elegance and peaceful beauty of this new built 4-bedroom modern, country charmer! Boasting magnificent views of the northern/ eastern mountain range & the gorgeous Huachuca mountains, a hike away. The front porch & yard provide an idyllic ambiance for the beauty of this quiet country style neighborhood. Featuring a wonderful spacious open floor plan, to include 4 bedrooms, 2 bathrooms, a den, vaulted ceilings, larger windows, taler doors & an open concept - split bedroom plan, with an oversized 3 car garage. Just beautiful are the buttercream-colored cabinets accented with the darker granite counters. A lovely kitchen island & charming dinning create such a relaxing yet elegant dining experience. The wood tile flooring throughout makes for easy living and a great look. Stop in to see this gorgouse home and you too will fall in love!

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25664 N 162nd Drive Surprise, AZ 85387

$465,000

3 Beds

2 Baths

2,041 SqFt

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Property Type Single Family Residence

Price Type --

This gorgeous, highly upgraded floor plan is model home perfect. This 2041 Sq Ft. single level property has an open floorplan, 3 bdrms, 2 baths plus a den/flexspace! It was built in 2020 with lots of upgrades! Step inside to a home that is light, bright and a beautiful blend of luxury and comfort. This home is better than new, it boasts beautiful white shaker cabinets with a beautifully deigned backsplash, luxury wood-look flooring, Brand new Carpet throughout the house as well as stunning granite countertops which make for a sleek and sophisticated look! The impressive gourmet kitchen offers a gas cooktop and and an island breakfast bar. 8ft doors throughout the house. The owner's suite is spacious with a walk in shower. This home also comes with a backyard designed for easy maintenance.

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15622 W Yucatan Drive Surprise, AZ 85379

$465,000

4 Beds

2 Baths

2,407 SqFt

Status Active

MLS # 6672604

Property Type Single Family Residence

Price Type --

Meticulously maintained and cared-for home on a quaint, tree-lined street in Greer Ranch. Located in the beautiful city of Surprise. This 4 bed 2 bath home has a large living room with a separate formal dining room. Upgraded with durable, wood laminate flooring throughout. Fully landscaped front and back with auto watering system. Spacious kitchen with SS appliances. Built-in bookshelves. Custom front security screen door. Huge primary suite. Ensuite with privacy door. Covered back patio with an extended concrete slab. Split 3-car garage. 3rd bay has lots of built-in storage cabinetry. Great for a workshop or man cave. Must see this beautiful home!

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45240 W Windrose Drive Maricopa, AZ 85139

$465,000

5 Beds

3.5 Baths

3,432 SqFt

Status Active

MLS # 6674588

Property Type Single Family Residence

Price Type --

The home features an open floor plan with a formal living and dining room, as well as a great room that overlooks the backyard. It includes a half bath downstairs for convenience and 5 bedrooms upstairs with 3 additional bathrooms. The kitchen has plenty of cabinet space with a desk area, walk-in pantry, granite countertops, and an under-mount sink. Large tile is in the traffic, kitchen, and wet areas, with neutral carpet in the rest of the home.

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7508 W Beryl Avenue Peoria, AZ 85345

$465,000

3 Beds

2 Baths

1,816 SqFt

Status Active

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Property Type Single Family Residence

Price Type --

Light and bright this Peoria home with a pool boast all tile and vinyl floors, granite countertops and plantation shutters throughout. Primary bath has garden tub, 2 closets and executive height countertops with custom glass tiles surrounding mirrors. Newer roof, AC and water heater. Newly painted, updated ceiling fans, light switches and outlets throughtout. Plus the vaulted ceiling, split floorplan and living/family room combo make this house a spacious place to call home. Large lot, RV gate and solar panels with NO HOA!

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8877 N 185th Drive Waddell, AZ 85355

$465,000

4 Beds

3 Baths

2,027 SqFt

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Property Type Single Family Residence

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Energy-efficient, newer smart home! Open floorplan. Four-bed, three- bath home featuring thoughtfully designed layout. Spacious primary suite with a large bathroom and walk in closet. Enjoy the convenience of bonus room nestled between two bedrooms, providing the perfect space for leisure and entertainment. Bedroom number four enjoys its privacy with a separate bathroom, offering comfort and functionality for guests or family members. Kitchen is open to dining and gathering room, appointed with a massive gleaming granite island, stylish backsplash, amazing pantry with abundant shelves, a gas stove. Fully landscaped, private backyard with block wall privacy, pavers, and turf. Breathtaking views of the White Tank mountains, quiet location, minutes away from Whitetank Regional Park. Park with play area right around the corner. Conveniently located close to the 303 freeway.

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1650 E Ponderosa Parkway Flagstaff, AZ 86001

$465,000

2 Beds

2 Baths

1,134 SqFt

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Welcome to your ideal Flagstaff condo! This 2-bed, 2-bath gem on Ponderosa Parkway offers unbeatable convenience near downtown, NAU, hiking, and dining. With all appliances included and an elevator for easy access, this condo is both practical and luxurious. Enjoy two covered patios, one off the owner's suite, and another from the main living room. Don't miss this opportunity for prime Flagstaff living!

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14643 N 35th Drive Phoenix, AZ 85053

$465,000

4 Beds

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Welcome to your beautifully updated 4 bedroom 2 bath split floorplan. Nicely priced for a quick sale. Interior has been completely and tastefully renovated to include brand new kitchen cabinets and quartz countertops, bathrooms, flooring, even the windows have been replaced. So much closet and storage in this spacious home, the huge laundry room can double as extra storage/pantry space. All appliances including washer and dryer. Move in ready. Great location near the I-17, loop 101, ASU West Campus, and GCU.

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6344 W Berkeley Road Phoenix, AZ 85035

$465,000

4 Beds

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2,019 SqFt

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This must-see completely remodeled home provides a large open floor plan with plenty of space for family and friends to enjoy. A lovely kitchen with white shaker cabinets, beautiful quartz countertop, stainless steel appliances, gas range, and a large walk-in pantry is sure to please the chefs in the family! A bright airy Arizona room adds more room for family gatherings. Plank flooring and new carpet in bedrooms. Ceiling lights throughout. New roof and new insulation. Beautiful fence with iron in front yard and block in back. RV Gate. This over 2k foot 4-bedroom 2-bath home is minutes from central Phoenix, parks, shopping, and stadiums; it's everything you're looking for and more.

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951 S 240th Drive Buckeye, AZ 85326

$465,000

4 Beds

2.5 Baths

3,140 SqFt

Status Active

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Property Type Single Family Residence

Price Type --

Welcome to your dream home in the upcoming city of Buckeye. This open concept home features 4 bedrooms, 2.5 baths, 3140 sqft and is the corner lot of the cul-de-sac. As you walk through the front door you notice the vaulted ceilings throughout the first level and space for your creativity to unravel. The backyard has a full-size pool, fire pit, and a newly added pergola perfect for entertaining family and friends. The entire house (inside & out) is set to be professionally painted 4/15. Beyond the walls of this exquisite home, the Acacia Crossing community provides a welcoming environment with scenic views and an array of amenities. From the Buckeye Recreation Center, parks & trails to nearby shopping and dining options, this neighborhood offers a vibrant and convenient lifestyle.

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9614 E Nacoma Drive Sun Lakes, AZ 85248

$465,000

2 Beds

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$465,000

2 Beds

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Home Sweet Home!! GATED community! Nicely upgraded throughout! Tile, laminate flooring, upgraded bathrooms with tiled showers, granite countertops in the kitchen! 2 bedrooms/ 2 bathrooms/ 1 car garage with a balcony!! Stainless steel appliances in the kitchen! Close distance to Fashion Square mall, Scottsdale multi use bike park, Starbucks, Osborn Medical, restaurants, Scottsdale Stadium, golf, parks, art galleries, t101 freeway, and all else this fantastic location has to offer location has to offer. Refrigerator, washer and dryer stay!! Enjoy the community pool/ spa!! Perfect for primary home or investment! Buyer to verify schools, HOA and all info. Professional pictures coming soon.

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