San Carlos Train Station – Built in 1888
Real Estate Deductions and the I.R.S.
Don’t forget the new real estate tax deduction. There’s a new standard tax deduction for homeowners. They can add a standard deduction of up to $1,000 if they pay real estate taxes. This will prove especially beneficial to homeowners who have paid off their mortgages and don’t deduct mortgage interest payments from their taxes.
And, if you were a first-time home buyer in 2008, you may be eligible for a tax credit of up to $7,500 or 10 percent of the purchase price, whichever is less.
There is an important catch to this credit, though. You have to pay it back in the next 15 years, in equal amounts each year, which makes it a bit more like a loan than a credit. So if you take the maximum credit of $7,500, you will have to pay back $500 per year for the next 15 years.
But it still helps you get some much needed cash now when the economy is so bad, and you can pay it back a little at a time as things get better.
