Homeowner Tax Perks 
tax perks

Are you a new homeowner or considering buying a home in the future? Owning a home gives you access to special federal income tax breaks, and taking advantage of them could help you at tax time. Below are some main tax perks that you can look forward to! 

 

Home Mortgage Interest

 

If you took out a mortgage on or after Dec. 15, 2017, you may be able to take a mortgage interest deduction on up to $750,000 of mortgage debt for your primary residence. Interest paid on your home equity loan or line of credit may also be deductible if you used the money to buy, build, or substantially improve the house that secures the loan.

 

State and Local Taxes 

 

Real estate taxes can be high in some areas. But, you may be able to deduct some of your property taxes. For federal tax returns, the law allows taxpayers to deduct up to $10,000 of the total of your state and local property taxes plus either income taxes or state and local sales taxes.

 

Energy Update Credit

 

Another way to qualify for tax incentives is making your home more energy-efficient. Be sure to do your research to determine what tax credits you may qualify for.

 

Home Office Deduction 

 

With the pandemic still altering many people’s lives, working from home remains common. So, if this is you too, you may also be able to write off home office costs. Keep in mind that the space in your home must be an area that is solely used for work.

Plus, it does also need to be your principal place of business. So, speak with your trusted tax advisor to see if this applies to your situation.

 

Property Tax Deduction

 

When you own a home, you can write off up to $10,000 worth of your property taxes. Similar to claiming mortgage interest on your taxes, you must itemize your returns to be eligible. 

 

Charitable Contributions 

 

If you made a tax-deductible donation to a qualified charity, you can add it to your total itemized deductions. In most cases, you’re allowed to deduct cash contributions that equal up to 60% of your adjusted gross income.

 

Bottom Line

 

Once you own a home, you qualify for several new deductions, credits, and tax breaks. These may save you a significant amount of many, so it’s worth seeing what you are eligible for! Plus, they could result in a larger tax refund.