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Brentwood, TN Real Estate Taxes
Tax implications of real-estate
We just thought Spring was around the corner…. Hopefully our weather here in Brentwood, TN will turn around soon, and our temps will reflect that we are almost in April! But with Spring, comes the (oh- so joyous) task of tax preparation.
The tax implications of Real Estate are large, especially for those who are unaware of how refinancing, owning rental property or even staying a renter yourself, can apply to them long term.
It is important to check with your tax advisor before any real-estate transaction or refinancing. This is due to the fact that it potentially lowers the mortgage interest you can claim on your federal taxes, which in turn can raise your tax bill and yield a very unpleasant surprise when filing.
Capital gains taxes can be a minefield, so going in prepared and knowing how to navigate owning property can relieve the headaches of an unexpectedly large tax bill. Selling an income property or even renting out your home for short periods of time have income liabilities as well. Prepare by researching local city and state tax laws to see how this affects you on all levels.
Don’t just save receipts for tax time, make sure to save them for your realtor! The money you invest in remodeling can impact the amount of money the IRS considers profit when selling your home. Also, don’t forget the energy saving credits you might be earning by replacing older AC units, windows, insulation etc. These can potentially lower your tax bill.
The scenario of homeownership isn’t appealing to everyone, but at some point as your income increases, speaking with your tax advisor might be beneficial to your taxes. Mortgage interest can potentially offer potential tax relief that can offset your increasing income level.
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