Unlocking Your Home’s Hidden Tax Advantages

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.

Property Taxes

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!