Time To File Your Taxes! If You are a Homeowner, Take Advantage Of The Benefits
Homeowner Tips And Resources That Could Save You Money When Filing Your Taxes
As a Realtor, I often get asked if there are any tax advantages to owning a home. The answer is, yes, there are many benefits to owning a home! While I am not an accountant and do not give tax advice, there are several benefits that are well-known, and some that are less common. Below is a list I rounded up, featuring tips and resources to consider taking advantage of when filing your taxes.
Two of the most well-known deductions for homeowners are interest that qualifies as home mortgage interest, as well mortgage insurance premiums.
As a homeowner, you can deduct your property taxes. Some people forget about this as their property taxes may be included in their mortgage payments.
According to the IRS, home improvements are counted as anything that adds value and prolongs the life of home such as plumbing, wiring, installing an air conditioning, or putting on a new roof. You can’t necessarily deduct these costs, but you can add the price of materials and labor to the basis of your home. In certain circumstances, this will reduce the tax owed on the sale of your home in the future, if you decide to sell it. Please note, home repairs are distinct from home improvements. The difference between home repairs and improvements are outlined, here.
Energy Efficient Home Products and Appliances:
One of the best ways to lower your taxes is to take advantage of energy tax credits by installing qualified energy generating systems. Homeowners can get a one-time federal tax credit of 30% of the cost of qualifying geothermal heat pumps, solar water heaters, solar panels, small wind turbines, fuel cells, and other items placed in service for an existing or new construction home through December 31, 2016. There are some home products, particularly appliances that are Energy Star rated, that may qualify as a tax deduction as well. Have a look at the full list of Federal tax credits for energy efficient home products, here.
Although I am not an accountant and do not give tax advice, I hope these tips have been informative!