It’s that time of year and many of you are undoubtedly putting the final touches on your tax return. Whether you have hired a professional accountant or if you are tackling those taxes yourself, make sure to make the most of your home. Here are four tax breaks to consider
if you are a homeowner:
- Interest expense: The most common tax break, all homeowners can deduct interest paid toward a mortgage. Homeowners can deduct interest expenses on up to $750,000 of mortgage debt from their income taxes, though when they itemize these deductions, they forgo the standard deduction of $12,000 for individuals or married couples filing individually, $18,000 for head of household & $24,000 for married filing jointly.
- Capital appreciation: While the home increases in value during ownership these gains are not taxed at the federal level. For Single status homeowners, you can exclude up to $250,000 in home appreciation when figuring capital gains. An exclusion of $500,000 for filing jointly.
- Secondary residences: The mortgage interest on your primary residence, as well as on a second residence. (There are limits, but relatively few taxpayers are affected.)
- Home Office: If you work from home, you may take deductions for your home office. Although mortgage principal is never deductible, only interest, you can also deduct a portion of property tax, utilities, homeowners insurance, etc.