How Buying A Home in Athens Will Impact You Next Tax Season

In most cases up until this year, buying a home presented a good number of tax benefits in the form of certain deductions. Those benefits still exist, but they have been watered down for some people in some situations. So it pays to know how buying a home in Athens will impact you next tax season. Even if you’ve already made the decision to buy, it’s good to know what you’ll be facing.

Tax Benefits for Next Tax Season

The benefits next tax season for buying a home in Athens are still pretty substantial and include these main ones:

MORTGAGE INTEREST DEDUCTION

This is a major tax break available to homeowners, especially in the early stages of mortgage payment when the bulk of each payment goes to interest instead of the principal. So if you’re buying a home in Athens, this is definitely a tax benefit you’ll want to take advantage of next tax season.

PROPERTY TAX DEDUCTION

Property taxes are inevitable, but with this deduction, you can get some of that money back next tax season in Athens. Statistics show that the average American household pays slightly more than $2,000 every year in property taxes, and the more you pay, the more you can deduct. Just be aware that you have to claim this deduction in the year you pay the property taxes.

HOME OFFICE DEDUCTION

If you’re a freelancer or are self-employed in some other way and work from home, then you’re in luck next tax season. With the home office deduction, the IRS allows you write off a portion of your office expenses such as heating and lighting costs, water, and Internet and phone. You just need to figure out what percentage of your total square footage the office square footage is and then calculate those expenses according to that ratio from your total expenses. You will have to itemize to take the home office deduction.

Limits/Restrictions for Next Tax Season

Some recent changes in tax law will affect some homeowners and not in a good way economically, for example:

  • Formerly, the cap on the principal for mortgage interest deductions was $1,000,000 plus an additional $100,000 for equity debt. Now, however, new mortgages cap at $750,000 for mortgage interest deductions. This won’t affect a lot a people buying homes, but it is something some need to be aware of for next tax season.
  • There are also new restrictions on deductions with respect to refinancing. As mentioned, the qualifying mortgage interest deduction formerly included an additional $100,000 for equity debt, usually used for home improvements. This deduction has now been eliminated.
  • In the past, if you itemized, you were able to deduct property taxes and sometimes sales tax. Now, with the new changes going into effect next tax season, while you still have those deductions available, the limit is $10,000 for all state and local taxes.
  • Also, before the tax changes, if you suffered economic loss due to natural disaster, you could claim a casualty loss deduction. But now this has been done away with except for loss attributable to a federal disaster.
  • Finally, there is no longer a deduction for mortgage insurance premiums. And this will be a roadblock to homeownership for those people who are unable to come up with at least a 20% down payment.

So how will buying a home in Athens impact you next tax season? Probably, mostly for the good (although there are some tax changes that will negatively impact some people). Buying a home when coupled with tax law can be a pretty complicated affair. But we can make at least part of it a lot simpler.

Are you ready to buy a Athens house? We can help! Send us a message or give us a call today! 706-426-1082

Georgui Kassaev

Georgui Kassaev was invited to this country in 1996 during the Atlanta Olympic games. The first place he came to call his home after leaving Russia and performing all over Mexico, was Athens. He became a professional mixed martial arts fighter, then coach, and eventually obtained two black belts in taekwondo and Brazilian jiu-jitsu. He formed a specialty carpentry and construction business which sparked his passion for real estate. He then rediscovered his first passion performing. After all, he has performed in the circus since he was eleven years old in front of thousands of people and then again when he was an adult as a professional fighter. In 2018 he landed his first 3 television roles. While acting, he continued developing his real estate skills, becoming a value-add investor in the Classic City and then getting his real estate license. He has now become a listing specialist in the Greater Athens Area, working with homeowners to protect their interests and get them the right price for their property! However, he never abandoned his construction roots and works with investor clients to help them buy properties based on their numbers with no aversion to making multiple offers. Georgui is fluent in three languages Russian, Spanish, and English. He is proficient in video production and social media marketing.

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