Are You Missing Out on Homeowner Tax Breaks?

Are You Missing Out on Homeowner Tax Breaks?

Are you a property owner looking to reduce your annual tax burden? There are several homeowner tax incentives available that can lower your taxable income and result in huge savings when filing. In this article, we'll discuss the most common homeowner tax breaks that could benefit you this year.

The interest you paid on your mortgage is usually a hefty tax deduction for homeowners who itemize. This amount depends on when you took out your loan—the deduction may be up to $750,000 (or $375,000 if married and filing separately) for those taken out after Dec. 16, 2017, or up to $1 million ($500,000 if married and filing separately) for loans taken out between Oct. 14, 1987, and Dec. 15, 2017. Discount points paid when the loan closed may also qualify for a deduction as long as they don’t exceed the maximum deduction allowed for your mortgage interest.

Certain renovations of a medical nature may also qualify as deductible expenses—such as installing healthcare equipment or other medically-necessary home improvements that benefit you and your household—though permanent improvements that increase the value of your home require subtracting from the increased property value in order to get an accurate deduction amount. Home office expenses for self-employed individuals using part of their home regularly and exclusively for business purposes may also be deductible; refer to worksheets provided by the IRS to calculate exactly how much money you’d save with this incentive.

Lastly, you can deduct a maximum of $10,000 ($5,000 if married and filing separately) worth of combined property taxes ,state snd local income taxes or sales taxes when filing personal income taxes each year. Property owners who purchase and operate rental properties should also take advantage of asset depreciation benefits which allow an expected wear-and-tear allowance over time based on how old the property is (27 years for residential dwellings; 39 years for non-residential). Repairs can be deducted too; however upgrades like adding a new shed or remodeling bathrooms are not considered repairs but can still be depreciated over time along with larger purchases like appliances or furniture. Finally rental credits given in exchange for performing repairs are both deductible as an expense while qualifying as income at the same time.

In summary, there are numerous ways homeowners can greatly reduce their annual tax burden through various deductions and incentives designed especially with them in mind. By understanding these grants carefully and taking full advantage of them where applicable—not only will you save money on taxes but it gives an opportunity to invest back into your own financial health!