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馃敶 Homeowner Tax Write Offs in 2021 | How to Write Off Mortgage Interest, Property Tax, Home Office - YouTube
Channel: Lena Petrova, CPA - Finance, Accounting & Tax
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In 2021 real estate prices increased at an unseen聽
before rate. This was certainly great for those聽聽
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who already owned a home because, all of a sudden,聽
their built-in equity substantially increased聽聽
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just in a span of a couple of years. But for those聽
new home buyers trying to make an offer trying to聽聽
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purchase a home, it became a lot more challenging聽
and many first-time homebuyers are simply "priced聽聽
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out" as they cannot afford a home. In this video I聽
want to share with you several tax deductions for聽聽
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homeowners that can help make homeownership a bit聽
more affordable. To be specific, we'll chat about:聽聽
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writing off your property taxes, your mortgage聽
interest, home office tax deduction, as well聽聽
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as claiming the first time home buyer credit of聽
$15,000. Before we get started, let me just thank聽聽
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you all for supporting my channel here on YouTube.聽
Please check your subscription, if you're not yet聽聽
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subscribed, please hit that subscribe button and -聽
this is SO SO important - ring the bell to turn on聽聽
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video notifications, otherwise YouTube will not聽
tell you that there's a new video. For the past聽聽
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few years more than 90% of taxpayers have simply聽
taken the standard deduction instead of itemizing.聽聽
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This doesn't necessarily mean they weren't聽
eligible for the mortgage deduction.聽聽
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It just means that their taxes didn't go down聽
at all for incurring mortgage interest for聽聽
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2021. The standard deduction is $25,100 for filers聽
who are married and filing a joint tax return.聽聽
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Let's start with one of the biggest expenses for聽
any homeowner - property taxes. Can you deduct聽聽
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property taxes in 2021? For 2021, there is a聽
cap on the deduction for state and local taxes聽聽
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at just $10,000 per year. This is regardless of聽
your tax filing status, by the way. So if you're聽聽
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married or single, technically, the first $10,000聽
of your state and local taxes are deductible.聽聽
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Beyond that, there is no tax benefit at the聽
federal level. Moving on. Another big ticket item聽聽
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is your mortgage interest. How much mortgage聽
interest can you deduct in 2021? For mortgages聽聽
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issued after December 15th, 2017, taxpayers can聽
only deduct interest on the first $750,000 of聽聽
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mortgage debt. This debt, by the way, can be held聽
on up to 2 homes, which is good news for those who聽聽
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purchased a second home during the pandemic. Now,聽
for homeowners who've had their mortgages longer,聽聽
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specifically, those issued prior to December聽
15, 2017, a "grandfather" provision allows聽聽
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interest deductions on up to $1,000,000聽
of mortgage debt, again, on up to 2 homes.聽聽
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Note that the $750,000 mortgage limit applies聽
per tax return, so home buyers who are聽聽
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not married could potentially buy a home, or even聽
two homes together, and deduct interest on up to聽聽
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$1.5 million dollars of mortgage debt, and, of聽
course, they would also get a total of $20,000聽聽
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in combined state and local tax deductions. Before聽
we continue I want to take a quick minute to thank聽聽
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the sponsor of today's video, Skillshare.聽
Skillshare is an online learning community聽聽
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with thousands of high quality, inspiring classes聽
for those who want to continue learning and do it聽聽
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in a fun and interactive way. You can explore new聽
skills and you can develop existing interests,聽聽
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ranging from creative hobbies to business. I聽
have been using Skillshare for several years now.聽聽
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My main areas of interest are photography and聽
video editing, but I also found great content on聽聽
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motivation and even cooking. I have a great offer聽
for you! Today, for my first 1000 subscribers聽聽
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Skillshare is offering FREE premium membership聽
for an entire month and it's only $10 per month聽聽
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afterwards. To claim this offer, please use my聽
link that I shared in the video description below.聽聽
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I personally use Skillshare to this day as a聽
student and I recently published several of聽聽
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my first courses there as well. I would love for聽
you to join the Skillshare community! One of the聽聽
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questions that I hear very often is - "How can聽
I become eligible for a home office deduction?".聽聽
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I do have an entire video I recently uploaded that聽
covers every single thing that you need to know聽聽
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about home office deduction, the requirements,聽
amounts how you can claim. If you haven't watched聽聽
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that video yet I will link it below. You're聽
welcome to watch it next. For purposes of聽聽
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this video, let me just put it in a nutshell.聽
If you are an employee of a company, you are no聽聽
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longer able to take the home office deduction.聽
However, if you are self-employed or a business聽聽
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owner - this can be part-time or even a side gig聽
- you may be able to deduct home office expenses.聽聽
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To qualify for the home office deduction, space聽
must be used "regularly and exclusively" for that聽聽
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business. So, doing work at a dinner table in your聽
kitchen where you and your family have meals and聽聽
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socialize will not qualify for home office tax聽
deduction, unfortunately. I would recommend you聽聽
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watch Home Office Tax Deduction video next for聽
more details on this tax break. Now, let's chat聽聽
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about the $15,000 first-time homebuyer credit. It聽
is still a bill as of the day of this video. In聽聽
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the spring of this year the U.S. lawmakers聽
introduced the First-Time Homebuyer聽聽
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Act of 2021. The main purpose of this act is to聽
help low and middle-income Americans get into home聽聽
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ownership. The law revised the IRS tax code and聽
granted first-time home buyers up to $15,000 in聽聽
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federal tax credits. The program applies聽
to all homes purchases beginning January 1,聽聽
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2021. If you want to claim this tax break I want聽
you to know that there are 6 requirements that the聽聽
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government wants you to meet. Let's take a look聽
at what those requirements are. To be eligible for聽聽
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the credit, you must be a first-time home buyer.聽
(eligible home buyers may not have owned a home聽聽
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or been co-signed on a mortgage loan within the聽
last 36 months. This includes primary residences,聽聽
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second homes and vacation rentals); must not聽
exceed income limitations for the area (eligible聽聽
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home buyers must earn an income that is no more聽
than 60% above the average income for the area);聽聽
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must be purchasing a primary residence, no聽
second homes or rental properties allowed;聽聽
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must be at least 18 years of age or married to a聽
person who is 18 years of age; must be purchasing聽聽
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a home from a non-relative. Something really聽
important to point out here - for homeowners聽聽
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whose tax bill is less than $15,000 the extra聽
amount would be paid via direct deposit directly聽聽
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into your bank account. I hope you get value聽
out of this video. Remember to watch the Home聽聽
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Office Tax Deduction Explained video next. It聽
will be linked below, if you need more details.聽聽
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If you enjoyed this video please show聽
some support by subscribing to my channel聽聽
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and - this is very important - please ring the聽
bell to turn on video notifications. I work very聽聽
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hard to create this content for you and I really聽
enjoy sharing with you and helping you access this聽聽
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information. Please consider sharing this video聽
to help others learn this valuable information.聽聽
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Thank you for watching. Let me know if you聽
do plan on making any of these tax moves聽聽
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to maximize your benefits. Thank you for your聽
time. I will see you in my new video tomorrow!
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