One of the many perks of homeownership is big tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those breaks!
Mortgage Interest Deduction
Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away!
Mortgage Points Deduction
Mortgage points are prepaid interest that qualifies the borrower for a lower interest rate over the life of the loan. Because it’s still a payment against interest, it qualifies for deductions.
Property Tax Deduction
Taxpayers who itemize their deductions on Schedule A are eligible to deduct real estate property taxes paid on their primary and secondary residences.
There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.
Home Energy Tax Credits
For homebuyers or homeowners looking to make their home a little greener, the Residential Energy Efficiency Property Credit can help offset the cost of energy efficiency improvements. An energy-efficiency tax credit may apply to storm doors and energy-efficient windows, insulation, air-conditioning and heating systems.
Medically Necessary Home Improvements
Homeowners may include as a medical expense deduction all or part of the amounts paid for special equipment installed in the home or for home improvements that are made primarily for medical care.
Consult your tax advisor to learn more about these tax savings for homeowners!