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$99,750 Extremely well maintained Round Rock Condo that's cheaper than rent! Wood laminate! Built-in bookcases, cabinets, and desks! Vaulted Master Ceiling! 2006 Trane HVAC and 2007 Water Heater! Laundry in Unit! Click for more info!

$179,750 Unbelievable size for the price! Under $70/sqft in Springbrook! One of best values currently available OR sold! New upgraded carpet throughout! Upgraded enlarged hard tile! Expensive window treatments! Click for more info!

Renting Out Your House or a Room? Deduct Expenses!!

If you have an investment property or you just rent out a room of your house, practically every expense on that house or room is completely deductible. Repairs to the investment property, any improvement cost, or expense are completely tax deductible.

If you just rent out a room of your house you have to divide what is for the room and what is for the rest of the house. Items and portions only for the rented room are tax deductible. So if new carpet is needed in the whole house, only count the cost of carpet for the square footage for the rented room as a deduction. Same thing for blinds, painting, or even providing your tenant with furniture. All items for the rented room are tax deductible.

Expenses for your entire home must be divided between the part you rent and the part you live in. This includes your payments for:

• mortgage interest.
• repairs for your entire home; for example, repairing the roof or furnace, or painting the entire home.
• improvements for your entire home; for example, replacing the roof.
• homeowners insurance.
• utilities such as electricity, gas and heating oil.
• housecleaning or gardening services for your whole home.
• trash removal.
• snow removal costs.
• security system costs.
• condominium association fees.

If the entire home is rented out, this is all deductible in it's entirety if the payment is your responsibility. You can also deduct depreciation on the part of your home you rent.

TAX BENEFITS OF HOME OWNERSHIP!

In the spirit of tax season, because they get me just so excited I can barely contain it, here are some tax benefits you can claim on your taxes as deductions. Reason to stop renting and purchase something? ....Quite possibly.

Deductible homebuying expenses: Certain closing costs involved in a home purchase are deductible from your taxes as itemized deductions. Loan origination fees or points, prorated interest on a new loan, and prorated property taxes paid at settlement for example are all deductions you can claim on your taxes.

Home mortgage interest deduction: Interest paid on a mortgage or mortgages of up to $1 million for a principle, homestead and/or a second home is deductible as an itemized deduction. With interest payments being particularly high in the early stages of a loan, this deduction can be particularly substantial during the first years of home ownership. 

Depending on the state a buyer lives in and the tax bracket their in, this deduction can reduce the cost of borrowing by one-third or more.

Property tax deduction: Homeowners can deduct state and local property taxes they on their home from their federal income taxes. Renter's won't get this kind of itemized deduction.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest paid as an itemized deduction. 

$250,000/$500,000 home-sale exclusion: The most financially glorious benefit of owning a home is the tax savings when a person sells it for a profit. If you sell your home and gain a profit of $250,000 for single homeowners and $500,000 for married homeowners who file jointly, you don't have to pay income tax on the gain of appreciation. CHA-CHING! The stipulation is that the homeowner must have lived in the home for two of the prior five years before it's sale. This exclusion can be used once every 24 months.

14 days of free rental income: A homeowner can rent out the home for up to 14 days during the year and pay no tax on that rental income. A renter who sublets their rental must pay income on ALL the rental income they earn.

There are also deductions such as a home office deduction where you can deduct the square footage of your home that is used REGULARLY AND EXCLUSIVELY as a home office from your property taxes. Renters can do this deduction as well.

Values of deductions can vary by state and it is recommended that you talk to a professional tax adviser before claiming any deductions on your taxes. Whatever the case, it is clear that the tax benefits of owning a home are far greater than renting.