Taxes are due April 15th. But did you know that merely owning a home could mean you qualify for tax breaks?
Here are some of the tax breaks you’ll want to investigate:
1. Mortgage interest paid at settlement
One item that’s generally listed on your closing statement is home mortgage interest. On a mortgage of up to $1 million, you can deduct the interest that you pay at settlement if you itemize your deductions.
Did you pay points in order to obtain your home mortgage? These fees are included on the income tax deductions list and can be deducted as long as they are associated with the purchase or refinance of a home.
3. Property taxes
As long as they are based on the assessed value of the real property, you can deduct your state and local property taxes.
4. Selling costs
If you sold a home in the past year, you may be able to reduce your income tax by the amount of your selling costs. These costs can include things such as repairs, title insurance, advertising expenses and real estate fees.
5. Home office
If you use a portion of your home exclusively for the purpose of an office for your small business, you may be able to claim a deduction on your taxes for costs related to insurance, repairs and depreciation.
6. Mortgage insurance premiums
You may be able to deduct the premiums paid for private mortgage insurance for your principal residence and for a non-rental second home.
7. Home improvement loan interest
If you’ve taken out a loan to make improvements on your home, you may be able to deduct the interest on this loan.
8. Construction loan interest
If you take out a construction loan to build a home, you may qualify to deduct the interest.
Tax codes can be very confusing. We suggest you consult the IRS website for more information concerning deductions and credits, or meet with a professional to ensure you’re not missing any deductions for which you’re eligible.