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Top Tax Breaks for Homeowners

Top Tax Breaks for Homeowners

If you own a home or are thinking of buying one, you’ve probably heard about tax breaks for homeowners.

Buying a home is typically the largest investment that everyday, ordinary folks make in their lifetime. A little planning goes a long way toward ensuring that you get the most value from homeownership. One way to create value is to reduce expenses – and tax deductions can help cut into your overhead.

When it comes to tax deductions, there are various benefits instituted by the government, aimed at encouraging more people to own homes. You can take advantage of these tax advantages by comparing your standard and itemized tax deductions and settling on the scenario with the highest tax benefits. Here are some itemizations that can help you make that determination.

Mortgage Interest

The deductions on mortgage interest are among the biggest tax benefits you can get on your home. Mortgage interest refers to any interest paid on a debt secured by the primary residence or second home. (Deductions are not applicable for interest paid on a personal loan, just home loans). Interest deductions can be taken up to $1 million of the loan used to acquire or improve the home.

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At the beginning of each year, your lender should provide you with Form 1098, detailing the total amount of interest you paid in the previous year. Check the settlement sheet to ensure that Form 1098 includes the interest you paid from when you closed on the home, to the last day of that month.

Mortgage Insurance Premiums (MIP)

Mortgage insurance premiums refer to extra fees paid to protect the lender should a borrower default on a home loan. These premiums are paid by buyers who make a down payment of less than twenty percent of the loan amount. Mortgage insurance premium deductions can be made on home mortgages issued from 2007 onward.

According to the IRS, if the adjusted gross income as indicated on Form 1040 is more than a hundred thousand dollars or fifty thousand dollars if you are married and filing separately, the amount of deductible mortgage insurance is reduced. The statement on the mortgage insurance premiums is available in Form 1098.

Mortgage Points

Mortgage points are fees paid directly to the lender/broker at closing in exchange for a lower interest rate. Points are deductible as interest if the loan is secured by the home and the amount you deposited at the closing as down payment is equal to the points.

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It does not matter whether you or the seller paid the points; you are entitled to the deductions as long as you meet the minimum requirements. You will be able to deduct your points in the same year you pay them if you itemize them on Schedule A of IRS Form 1040.

Home Improvement Expenses

If you have made home improvements, keep the receipts and other documents safely. Those expenses become tax breaks when you decide to sell your home. Current, the law allows you to add all the home improvement expenses on the purchase price of your home thus reducing the capital gains taxable amount.

IRA Payouts

As a first-time home buyer, you can take advantage of the IRA penalty-free withdrawal for your down payment. IRA rules allow you to withdraw up to $10,000 to help build or acquire a home for yourself or loved ones. The money must, however, be used to build or buy a first home within 120 days from the time it’s withdrawn. You can be considered a first-time buyer as long as you have not owned a home in the last three years.

However, even though not penalized, the IRA withdrawals are subject to federal and state tax. It is therefore not advisable to tap into this account unless there is no other option. Alternatively, you can withdraw your contribution to a ROTH IRA account, which is usually penalty free and tax free. The best thing about a ROTH is that after five years, you can withdraw up to $10,000 of earnings for first home purchase without incurring any taxes or penalties.

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Tax-Free Profit From Sale

Another tax break for homeowners is in the capital gains; a single person can sell a home for a profit of $250,000 and not pay a dime in taxes. Likewise, a married couple can sell a home and make a profit of $500,000 and still not pay anything in taxes. However, some conditions apply.

First, the home on sale must be your principal residence, and you must have lived in it for two of the five years before you sell it.

Energy Credits

You can earn an additional tax break on your primary residence through energy-saving home improvement practices. For instance, you can get credit for up to ten percent of the cost of installing things like insulation systems, qualifying central air conditioners, energy-efficient heat pumps, furnaces, water boilers and water heaters.

The credit can extend up to thirty percent of the cost for more expensive energy-efficient equipment.

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Home Equity Loans (HELs)

When your home appreciates in value, you can use the equity as security to borrow more money. Like a regular mortgage interest, the interest of home equity loans is tax deductible. Federal tax law permits mortgage interest deductions on up to $100,000 in home equity loan.

Adjust Your Withholding

The best place to check whether you are overpaying or underpaying your taxes is the W-4 form you filed with your employer. If you are always finding out that you have underpaid your taxes, check whether you are getting the mortgage interest and other deductions as required.

There are numerous ways you can genuinely claim deductions on your taxes. For instance, you can claim a deduction if you have a side job, a side business or you do some freelancing. Ensure you adjust your W-4 withholding by following the instructions on the IRS website.

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Last Updated on July 4, 2019

25 Killer Sites For Free Online Education

25 Killer Sites For Free Online Education

Whether you’re five or ninety five, the internet has a lot to offer. Particularly when the topic is education, the resources on the internet are endless.

Best of all, many high quality sites are completely free. From history to coding, excellent free online education awaits on the following 25 sites.

1. Coursera

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    Coursera is a website that partners with universities and organizations around the world. This brings a wide variety of topics and perspectives to one searchable database.

    Coursera is a powerful tool for free online education, and includes courses from many top universities, museums and trusts. This gives the site an extremely wide range of in-depth courses.

    Coursera is extremely useful if you’re looking to study many different topics, or want courses from different schools and groups.

    2. Khan Academy

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      Partnering with many post secondary schools, Khan Academy offers a useable, well organized interface. Also curating many courses from around the web, Khan Academy offers impressive depth on many different subjects.

      Among the more well known educational sites, Khan Academy is also incredibly useable, which may make it easier to keep learning goals.

      3. Open Culture Online Courses

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        If you are struggling to find exactly the material you are looking for, try Open Culture’s listing of free online education courses. The page highlights 1000 lectures, videos and podcasts from universities around the world. The site features a lot of material found only on universities private sites, all in easy to browse categories. This means you can find hundreds of university courses, without having to visit and search each university’s own site.

        Open Culture’s list features courses from England, Australia, Wales and many state universities around the United States. A very helpful resource for finding many courses in one area of study.

        4. Udemy 

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          Udemy’s free courses are similar in concept to Coursera’s but additionally allows users to build custom courses from lessons.

          Working with many top professors and schools, the site mixes the customizable platform of other sites with a heavy emphasis on top quality content. This is another site however, that mixes free and paid content.

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          5. Academic Earth

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            Another site with courses from many different schools is Academic Earth. Much like the three sites above, Academic Earth brings together top notch courses from many different sources, and focuses on offering a wide variety of subjects.

            Academic Earth lists courses by subject and school, so it might be easier to find what you’re looking for.

            6. edX

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              Another great option for free online education is edX. Also bringing together courses from many different schools, the site has impressive, quality information for everyone. edX covers a great range of topics.

              7. Alison

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                Unlike the previous sites on this lists, Alison is a free education site offering certification in some areas. Alison offers courses mainly in business, technology, and health, but also includes language learning courses.

                It’s a great option if users need certification for their learning as Alison also offers school curriculum courses.

                8. iTunesU Free Courses

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                  A very convenient place for free online education is iTunesU, because it integrates seamlessly with your iPod, or any app-ready Apple mobile device. On iPad, iPhone, or iPod touch, users download the iTunesU app.

                  Desktop users can access  iTunesU on the upper right hand corner of the iTunes Store. iTunesU is also convenient because the store is categorized much like iTunes.

                  Users can search learning materials in many different ways, including genre and topic. However, courses are often a mix of free podcasts or videos, and paid content.

                  ITunesU does include courses on a pretty wide scope of topics, but does not integrate with Android, Google or Windows mobile devices.

                  9. Stanford Online

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                    Your hub for all the online offerings from Stanford University, Stanford Online offers self-paced and session based courses. While Coursera features some courses from Stanford, many classes are only available via other hosts. Some courses require iTunes, but most are completed in your web browser.

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                    Stanford Online is a great site for high quality courses, though the topics are somewhat limited compared to sites partnered with more than one school.

                    10. Harvard Extension

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                      Like Stanford Online, Harvard Extension features free online education courses from Harvard only. This is another excellent source for top notch course material, though the course variety is less rich than multi-school sites.

                      Additionally, Harvard Extension allows you to search for courses by professional certificate. This makes it much easier if your online education goal includes certification.

                      11. Open Yale Courses

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                        Open Yale Courses echoes Harvard Extension and Stanford Online, in that it offers only courses from Yale. While the site is similarly limited to topics taught at the school, Open Yale Courses offers a lot of videos of actual campus lectures. The availability of videos makes the site a great option if you’re looking for quality courses, but learn better by watching than by reading.

                        12. UC Berkeley Class Central

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                          Much like the other schools on this list, UC Berkeley has a variety of free online education options. The school has slightly fewer courses than the schools above, but includes some supplementary lectures, webcasts and RSS Feeds, making it easy to keep up with the topics you choose.

                          13. MIT OpenCourseWare

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                            Similarly, MIT offers a variety of free courses. The school has a comparable number of courses to the schools above, plus includes very in-depth course materials on the subjects available. MIT also offers free RSS feeds, a convenient way to continue learning.

                            14. Carnegie Mellon Open Learning Initiative

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                              Carnegie Mellon’s free online education site is comparable with the other school’s on this list, however, Open Learning Initiative also covers a smaller range of topics. But for the topics that are covered impressive, in-depth material is available.

                              15. Codecademy

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                                Codecademy is a website dedicated specifically to teaching coding. Where other coding sites follow an example/practice session workflow, Codecademy includes a live practice window. This means you can practice coding while still viewing the lesson material.

                                The courses at Codecademy are well written and easy to follow and the website is organized very nicely. Codecademy features a centralized dashboard where you can monitor your progress, plus organizes lessons into complete modules. This lets you learn an entire language without needing to pick the next course manually.

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                                16. Code

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                                  Code is another website focused on coding and app writing. A site with high quality courses, Code also features learning options for kids.

                                  In addition to kid friendly courses, Code offers free online education classes on a wide variety of technology topics. These classes include app writing, robotics and Javascript.

                                  Most of the courses are also geared in a such a way that they can be useful in a classroom setting. This makes Code a great resource for harder to find coding topics, as well as various learning settings.

                                  17. University of London Podcasts

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                                    The podcast page on the University of London website is another great source for free education. While the courses are limited to podcasts, the site features podcasts from it’s own campus, as well as eleven universities in and around London. This gives learners a wide base of topics and lectures, but still ensures in-depth material.

                                    18. University of Oxford Podcasts

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                                      Similar to the University of London, the University of Oxford features many different podcasts. Most are public lecture series or lectures from visiting professors, with several different recordings available.

                                      The advantage to this particular site is that podcasts are organized into series, making it easy to subscribe to multiple lectures on one topic. Another good site for thoroughly in-depth lectures.

                                      19. BBC Podcasts

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                                        For the more casual learner, the BBC offers a wide variety of podcasts on many different topics. Most podcasts are updated weekly, and focus on everything from finance, to sports, to current events.

                                        Through the World Service line of podcasts, there are also many in different languages. The focus of these podcasts are less in-depth and theory based, which may be more accessible to the average person.

                                        20. TED-Ed

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                                          Another great destination for more general learning is TED-Ed. From the same people that brought you the all encompassing, motivational web series, comes a site chocked full of educational videos. Most include impressive animation, and all are ten minutes long or less.

                                          Not only is TED-Ed an excellent site for the curious, it also includes supplemental materials and quizzes on the videos. This makes the site extremely useful in formal education settings, as well as in entertaining ways to brush up on new discoveries and topics.

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                                          21. LessonPaths

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                                            LessonPaths is another great tool for those looking for a more usable and convenient way to access learning material. On this site, users create link playlists of their favorite learning materials from other sites. Users then rank these collections, making it easy to find many different high quality, accessible sources on a given topic.

                                            22. Memrise

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                                              Another impressive free online education site offering ease of use and convenience is Memrise. Available both on desktop and as an app, Memrise is a particularly powerful tool if you are studying a language. The site encompasses many other topics as well, though some of the course material is user generated content.

                                              Part of what makes Memrise special is their integration of games into the learning materials, mixing learning with entertainment.

                                              23. National Geographic Kids

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                                                The kids site for National Geographic is another site that makes free online education applicable for younger users. For those looking for kid friendly education, a large variety of games, puzzles, videos and photos keeps kids interested on this site.

                                                National Geographic Kids doesn’t organize learning into courses, making materials available by topic and medium instead. This makes National Geographic Kids a good option for those looking for a more casual learning environment.

                                                24. Fun Brain

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                                                  Fun Brain is another good option for kids who want to learn online, but focuses on games and fun puzzles. Particularly focused on math and reading, Fun Brain’s game based approach can be valuable if the child in question struggles to pay attention.

                                                  Fun Brain offers rewards and challenges as well, and is another site aimed at a casual learning experience for kids K-8.

                                                  25. Whyville

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                                                    Similar to the sites for kids free online education is Whyville a destination for preteen online learning. The site includes a variety of social features, with a focus on learning materials geared for young teens.

                                                    Whyville also mixes in educational games, to make the site a well rounded option for kids too old for simple games, but too young for heavy reading based material.

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                                                    Featured photo credit: Dai KE via unsplash.com

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