While we heard plenty about the negotiation battles leading up to the New Year’s looming fiscal cliff, after the fact, many people might not consider how passed legislation personally affects them — especially when it comes to Santa Cruz real estate.
If you haven’t filed your 2012 taxes yet, you might want to take a minute to review the tax limitations and credit extensions, which Congress passed through the HR 8 legislation. You’ll want to ensure you’re paying the right amount when it comes to coughing up your money to Uncle Sam.
The tax credit for homeowners to receive a ten percent deduction, up to $500, for energy efficient improvements to homes is extended for 2013.
Individual estates valued at up to five million dollars and family estates valued at up to ten million are now exempt from estate tax. After those cutoffs, the rate is 40 percent, which is up from 35 percent.
Mortgage Forgiveness Debt Relief Act
This act was also extended through 2013. It means that debt reduced through mortgage restructuring or debt forgiven in the case of a foreclosure may not be taxable.
Mortgage Insurance Premiums
This deduction for those making under $110,000 is extended through 2013.
These limitations that reduced the value of itemized deductions are permanently repealed for most taxpayers. However, they will be reinstituted for individuals making over $250,000 and married couples making over $300,000 and filing jointly. If we had fallen off the fiscal cliff, anyone making over $174,450 would have been affected.
Ensure you’re taking advantage of all of the Santa Cruz real estate tax breaks available to you. Especially if you’ve purchased property within the last year, speak with your Realtor to make sure you cover all of your bases before you file.
If you’re interested in buying a house this year or would like more information on how this bill affects homeowners, please call me at 831.662.6522 or email me at Lauren@LaurenSpencer.com.
For additional real estate information, please visit my home page at www.MySantaCruzRealEstate.com.