Before you fly off the handle & think that those are my words let me stop you & say that was an email I received from someone that saw one of my ads. My response was in several parts
- As your rent continues to rise, your mortgage stays the same.
- In 5 years when you are paying an extra $150 per month, you will actually have some equity in your home
- When you look at your effective tax bracket after deducting your mortgage interest, let's see how much more you get back which in turn lowers your payment even more
- Then there's that one little thing that just doesn't mean that much. It's called pride. Knowing that you actually own the home. Knowing that it is yours. As if that's not enough!
I just don't get it some days. I mean it's the American Dream. I started really looking into it & I found something great on msn.com last night about your home & having a home office:
Here's where, in my opinion, the IRS actually crossed the line. But since it was in favor of the taxpayer, I'm not going to complain.
Let's say you use 20% of your house as a home office and you deduct depreciation and expenses for working in
that part of the house.
In the past, when you sold your house, 20% of the gain wouldn't qualify for the exclusion because that 20% wasn't used as a "residence." It was used exclusively as your office.
Now, the IRS doesn't care even if you used your home 90% for business as a home office. You can now exclude as much as 100% of your gain, up to the $250,000/$500,000 limit.
You're going to be subject to tax only on the gain to the extent of depreciation taken on the building since May 7, 1997. But that's taxed only at a rate no more than 25%.
Wow! That means, if you qualify, there's no reason not to claim a home office. And I know there are any numbers of people who work out of their homes who don't claim home offices now.
Dorothy was right: "There's no place like home." At least for now.
- A free piece of Schnepper advice: You should check IRS Publication 587 (.pdf download) on home-office deductions. Also, check Publication 523, "Selling your home."
For help or questions contact:
Senior Loan Consultant - NMLS #126036
GMH Mortgage Services, LLC
625 W. Ridge Pike, Building C, Suite 100 | Conshohocken, PA 19428 | Direct: 610-355-8039 | Cell: 610-739-6563