The benefits associated with Ohio home ownership are present in many aspects of life, but since it is Tax Time, let’s look at 2 of the more prevalent tax benefits of owning a home in Ohio.
1. Ohio Mortgage Tax Deductions
Some of the popular deductions that homeowners see on their taxes are:
- Home Mortgage Interest Deduction – the IRS allows you to deduct the mortgage interest that you pay on a loan secured by your home (primary residence or a second home) if you file Form 1040 and itemize your deductions on Schedule A AND the mortgage is a secured debt on a qualified home in which you have an ownership interest. You can read more in the IRS’ Publication 936.
- Some Closing Costs – Did you pay points to get a better rate? If so, the IRS may allow you to deduct all the Points paid on the mortgage. You can read more in the IRS’ Topic 504 – Home Mortgage Points.
- Private Mortgage Insurance – the IRS currently allows Ohio homeowners and homebuyers to deduct amounts paid for Private Mortgage Insurance (PMI) on Conventional Loans, Mortgage Insurance Premiums (MIP) on FHA loans, and Mortgage Insurance on VA or USDA mortgages. You can read more in the IRS’ Publication 936.
- Property Taxes – a good part of your monthly payment is probably made up of property taxes. The amount you paid for property taxes through your escrow account should be included on your annual statement that also shows the mortgage interest paid. You can read more in the IRS’ Topic 503 – Deductible Taxes.
2. Ohio Capital Gains Exclusion on Sale of Your Home
Currently the IRS may allow you to exclude up to $250,000 (if you are single) or $500,000 (if you file jointly) in gains from the sale of your main home. According to IRS’ Topic 701 you are eligible for the exclusion if you have owned and used your home as your main home for at least 2 years out of the previous 5 years.
You are best served to contact a CPA to discuss these items in more detail.
If you would like to discuss your options to buy a home in Ohio you can CONTACT ME, or complete the simple, no obligation, no social security number required Get Pre-Qualified in Ohio form.