April 2nd, 2024 5:00 PM by Eric Willner
Radio Show Notes 04/02/24 Tuesday:
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"Unlocking Tax Secrets: How Homeownership Leads to Big Savings!"
By Eric Willner, Host of The Real Estate Show, America’s longest running daily radio show about real estate.
Welcome to The Real Estate Show – South Florida’s #1 Real Estate Radio Show and America's longest-running daily radio show about real estate. I'm Eric Willner, known as the Voice of Real Estate and the founder of America’s longest-running daily radio show about real estate. I'm also the creator of The Automatic Landlord System for Owning Cash Flowing Real Estate ‘Profitably and Hassle-Free’. It’s a virtual real estate seminar in every episode.
Today, we're going to delve into a topic that every real estate investor should be familiar with: how Real Estate Owners Make More and Pay Less Taxes. In today's highlighted Tools and Techniques segment, let’s dive into the practical part. Yesterday, I gave you the steps – 7 ways that Real Estate Owners Make More and Pay Less Taxes.
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Before we get into the meat of the show, let me remind you of this week’s special FREE Workshops:
1. Tuesday 8pm Path To Home Ownership Introduction – Online by Invitation by texting “Path”
2. Wednesday night 8:30pm Financial Edge University Overview – Online by Invitation by texting “Edge”
Now, let's break down the 7 Ways Real Estate Owners Make More and Pay Less Taxes:
1. Mortgage Interest Deduction: One of the most significant tax benefits of owning a home is the ability to deduct a portion of the interest paid on your mortgage from your taxable income. This deduction can lead to substantial tax savings, particularly during the early years of your mortgage when a larger portion of your monthly payments goes towards interest. By reducing your taxable income, you lower the amount of tax you owe to the government, putting more money back in your pocket to reinvest in your property or other financial endeavors.
2. Property Tax Deduction: Another advantage of homeownership is the ability to deduct property taxes paid on your home from your taxable income. Property taxes can be a significant expense for homeowners, especially in areas with higher property values or millage rates. Being able to deduct these taxes can result in considerable tax savings, allowing you to keep more of your hard-earned money and reinvest it back into your property or other investments.
3. Capital Gains Exclusion: When you sell your primary residence, you may be eligible to exclude a portion of the capital gains from your taxable income. For individuals, this exclusion is up to $250,000, while married couples filing jointly can exclude up to $500,000. This means that if your home has appreciated in value over the years, you can potentially keep a significant portion of the profits tax-free, providing you with additional funds to use towards purchasing your next home or other financial goals.
4. Deductible Home Improvement Costs: Certain home improvement costs can be deducted from your taxes in the year they are completed, as long as they are considered permanent improvements that add value to your home. These improvements can include renovations, additions, or upgrades that enhance the functionality, aesthetics, or energy efficiency of your property. By deducting these costs from your taxable income, you can offset some of the expenses associated with maintaining and improving your home, while potentially increasing its overall value.
5. Mortgage Insurance Premium Deduction: If you are required to pay private mortgage insurance (PMI) on your loan, you may be eligible to deduct the premiums from your taxable income, subject to certain income limitations. PMI is typically required for borrowers who make a down payment of less than 20% on their home purchase. By deducting these premiums, you can lower your taxable income and reduce the amount of tax you owe, providing you with additional financial flexibility and savings.
6. Potential Deduction of Second Mortgage Interest: If you have taken out a second mortgage, such as a home equity loan or home equity line of credit (HELOC), to fund substantial home improvements, the interest paid on these loans may be tax-deductible in some cases. This deduction can provide additional tax savings and make it more affordable to finance major renovation projects or repairs. However, it's essential to consult with a tax advisor to determine your eligibility and ensure compliance with IRS regulations.
7. Avoidance of Rent Deduction Elimination: One significant advantage of homeownership is the ability to potentially itemize deductions such as mortgage interest and property taxes, which renters cannot claim. While the standard deduction has increased in recent years, some homeowners may still benefit from itemizing their deductions, especially if they have significant mortgage interest or property tax expenses. By itemizing deductions, you can lower your taxable income and reduce the amount of tax you owe, providing you with valuable tax savings and financial flexibility.
These steps are crucial for real estate investors looking to maximize their profits and minimize their tax liabilities. By taking advantage of these tax benefits, you can keep more money in your pocket and achieve greater financial success.
But let's not forget about the challenges that many Americans face when it comes to homeownership and taxes. From high property taxes to complex tax laws, navigating the world of real estate taxation can be daunting. That's why it's important to educate yourself and seek guidance from professionals who understand the intricacies of the tax code.
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In summary, today's show has provided valuable insights into how Real Estate Owners Make More and Pay Less Taxes. Tomorrow, join us for our Wednesday Midweek Mortgage and Market Report for the latest updates in the real estate world. Thank you for tuning in, and remember, don't just listen, use our show to get started in real estate investing and attend our free online workshops. Text 'Path' for more information.
Also, you can listen to the entire 30 minute broadcast of any day’s edition of The Real Estate Show by clicking on the audio link on that days summary post. You can also watch the Facebook Live video at www.facebook.com/TheRealEstateShow.
Want to know more? If you are serious about real estate and paying off debt, then find out more on today and every day’s episodes and learn more about Real Estate Investing and learn HOW TO by listening to The Real Estate Show with Eric Willner , Live every weekday morning at 9 o’clock (EST) on Florida’s Money Talk Radio stations WWNN AM1470, FM 95.3 and FM 96.9. You can also hear us on the free apps: iHeart Radio and TuneIn. Recorded Rebroadcasts are available 24/7 on Facebook. Please share this and our Facebook updates.
Eric Willner is the Host and Founder of The Real Estate Show, an informative show about how to buy, own, and improve real estate the right way, on autopilot. - The Automatic Landlord way. (AutomaticLandlord.com) You can reach Eric Willner at Eric@Ericwillner.com or 888-595-7779.
Also listen to the rebroadcasts on demand on Facebook.com/TheRealEstateShow
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