Executive summary
Stressed about losing large portions of your hard earned income to Uncle Sam? Here at Steward, we’ve gathered up the best of the best tax tips and tricks for homeowners & investors in real estate to ensure that you’re setting yourself up for success and savings.
Check out our main blog post with all of our tax-saving strategies here!
Table of contents
Homeowner / Real Estate
- Deduct interest on mortgage: You can claim a deduction for interest on a mortgage—or mortgages—of up to $750,000, if you itemize your tax deductions.
External Guide: https://www.kitces.com/blog/tcja-home-mortgage-interest-tax-deduction-for-acquisition-indebtedness-vs-home-equity-heloc/
Video Guide: https://www.youtube.com/watch?v=1RpRrYJ6ubk
Steward Blog Post: https://www.oursteward.com/blog/to-buy-or-not-to-buy-a-home#strongConsofhomeownershipstrong_56
- Deduct property taxes: You can deduct your state and local property taxes, up to $10,000, if you itemize your tax deductions.
External Guide: https://www.thebalance.com/property-tax-deduction-3192847
Steward Blog Post: https://www.oursteward.com/blog/to-buy-or-not-to-buy-a-home#strongConsofhomeownershipstrong_56
- Home-sale exclusion: Sell Your House Properly. When time comes around to sell your home, if you've owned and used your your home as your main residence for at least two of the five years before a sale, you can exclude $250,000K off the gain ($500,000K for joint filers)
External Guide: https://www.kiplinger.com/article/real-estate/t056-c005-s001-new-rules-on-home-sale-profits.html
- Keep track of home improvement expenses: Keep track of your home improvement expenses in the event of a home sale, because the sale price of your home minus the improvement expenses (which equals your adjusted cost basis in finance-talk) determines the taxable profit of the sale.
External Guide: https://www.kiplinger.com/article/real-estate/t056-c005-s001-finding-your-home-s-tax-basis.html
- Homestead exemption: A homestead exemption (if applicable in your state) lets you protect some of the value of your home from being taxed.
External Guide: https://www.thebalance.com/what-is-a-homestead-exemption-5214447
- Home office deduction: Use part of your home or apartment regularly and exclusively for your money making endeavor and you can deduct $5 for every square foot (max 300 sq ft) that qualifies for the deduction.
External Guide: https://www.nerdwallet.com/article/taxes/home-office-tax-deduction
- Install renewable energy systems: The size of the tax credit varies and equals 26% of the cost of equipment and installation for renewable energy systems that were put in between 2020 and 2022, and 22% for systems installed in 2023.
External Guide: https://www.forbes.com/advisor/home-improvement/solar-tax-credit-by-state/
- 1031 exchange: Avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value.
External Guide: https://www.whitecoatinvestor.com/deferring-real-estate-taxes/
- Real Estate Depreciation: If you invest directly in equity real estate (or via syndications or private non-REIT funds), the depreciation of the property can eliminate the taxes on the income from the property for many years. Avoid the recapture of that depreciation by exchanging a property rather than selling it.
External Guide: https://www.whitecoatinvestor.com/depreciation/
Other Tax Strategy Guides:
Tax Efficient Portfolio Management
Income Tax
Gifting / Charitable Donations
Self-Employed / Business Owner
Estate Tax
Ready to implement these strategies, but don’t know how to execute the plan?
Check out our blog post on finding the best tax providers here.
We are often asked for recommendations for tax preparation (actually doing the forms) to complement the work we do with families on tax strategizing (planning in advance to lower future tax bills.) We were frustrated that no "Yelp" existed for accountants/CPAs/tax preparers, despite the fact that wealth advisors so often traded recommendations amongst themselves! So we put together this list based on recommendations from various advisors. Check it out here.
Steward ‘s mission is opening up the 1%’s wealth strategies to America’s up-and-coming families with a combination of 21st century tech and trusted advisors. We help families determine how, where, and when to invest and save on taxes in plain-English, with minimal time and effort. Steward can help determine the best way for you to save taxes, or we can at least get the conversation started. Give it a try here.
Do you want someone to guide you and your partner through saving taxes and reaching financial freedom? Reach out to me at ami@oursteward.com or schedule a free 15 min consultation to see if we’re a good mutual fit.
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