5 Tax Breaks Available to Homeowners
Owning a home has a wide variety of advantages:
(1) no longer being under the thumb of a landlord
(2) often paying less in housing costs month to month than renting
(3) having more control over your living space.
Because the government wants individuals to buy homes, there are a number of tax breaks available. While not all tax breaks are available to all homeowners, here are five of the most common:
1. Interest on your mortgage – This tax break allows you to deduct any and all mortgage interest payments. If you have a second mortgage, those interest payments are deductible as well. Even if you live there for more than thirteen days a year, or the property is rented for more than ten percent of the year, that interest is still deductible.
2. Mortgage insurance – Not everyone will be able to take advantage of this tax break. It requires that you earn less than $109,000 (as of 2015), and your policy has to be newer than 2006. If you meet these standards, however, you should be able to deduct premiums paid on mortgage insurance.
3. Property taxes – We all have to pay them, but luckily, most of us can deduct these property taxes from our other taxes. Save your payment statements to prove that you have paid these taxes.
4. Your home office – Do you have a room or a part of a room dedicated specifically to working at home? If you have devices or furniture that you use specifically as your home office, you can deduct the cost of those spaces from your taxes, as long as your home is the primary place for your business and the space is used only for doing work.
5. Energy efficiency – If you took steps to make your home more energy efficient, you probably can write these off as a tax deduction, up to $500. Items that count towards these deductions include new doors, new windows, better insulation, better heating or cooling systems, etc. If you use solar power, you could write off even more!