Did you know that homeownership has more financial benefits than building equity? Today I’m sharing some valuable insights about tax breaks that can make a real difference in your IRS bill and bring more affordability to your home. Let’s dive into the details, and as always, remember to consult with your tax advisor for personalized advice.
Mortgage Interest Deduction
The interest paid on home loans is deductible up to $1 million for both your principal residence and second home. To claim this, make sure to itemize your income taxes. Before filling out your tax returns, do a quick math check to see whether itemizing or opting for the standard deduction works best for you.
Did you know that all real estate property taxes are fully deductible? If you purchased your house within the last tax year, be sure to check the settlement sheet to ensure you include any reimbursement to the seller for prepaid property taxes.
Credit for Green Improvements
You may be able to deduct costs of energy-efficient improvements like water heaters, furnace, boiler, heat pump, windows, or roofing from your federal tax return. Be sure to keep receipts for anything that could be deductible.
Investment Property/Rental Property
Own a rental property? The costs you incur for maintaining and marketing it can be deducted from the income it generates, no matter your tax status. This includes mortgage interest, insurance, utilities, maintenance, repairs, advertising costs, management fees, and depreciation.
Home Office Deduction
Working from home? You may be able to deduct the costs of you home office that you use exclusively for business purposes.
Tax-Free Rental Income
If you rent out your home for a short period (14 days or fewer) during the year, the rental income may be tax free.
Make sure you’re not missing out on these fantastic homeowner tax benefits. I’m not a CPA or accountant, so make sure to run these potential deductions by a professional. If you’re looking for a CPA or accountant recommendation, feel free to ask. Your financial well-being is important, and I’m here to help!
I'm Leila Hays, and I'm on a mission to help you buy and sell at the same time without paying two mortgages or moving twice. If you're planning to make a move in the next year, it's not too early to plan. Click the link below to get started.
9303 New Trails Dr. Ste. 165
The Woodlands, TX 77381
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