Top tax write offs for home owners

It’s the most wonderful time of the year, said no one about tax season.

That can change this upcoming April 15 – especially if you recently purchased a home, or are in the process of doing so.

With some changes to the tax code, fewer Americans will need to itemize their filings due to changes to standard deductions.

Here, we break down some of the top tax write-offs* you should be aware of entering the new year, including some changes.

Mortgage Interest

Did you know homeowners can deduct mortgage interest on their taxes?

While the IRS places monetary limits on the total amount of debt, interest paid through the year is deductible for mortgages up to $1 million. The loan must have been taken out prior to Dec. 14, 2017.

You will want to watch for the 1098 tax form to utilize this incentive.

Home Office

 Anyone who works from home knows of all the perks – but it can also pay off on your 2018 return.

Restrictions on this deduction have tightened, and are limited to self-employed workers. You may also be required to use the office space in your home exclusively to conduct business, otherwise, it may not qualify for this tax perk.

Equity Credit Interest

If you paid interest on a home equity loan or line of credit, it could qualify for a deduction this tax season. The monetary limits are similar to those that govern mortgage interest.

Keep in mind that if you used your equity toward personal property, like paying for a car, it may not be used for a deduction. However, home improvements, such as a remodel, certainly do qualify.

Rental

If you are earning income by renting out a home, you can reduce your taxable income dollar for dollar through home repairs/improvements.

The amount spent on these upgrades can be deducted from taxable income, possibly easing your tax burden.

Property Taxes

There are some changes to the amount of state and local property taxes homeowners can deduct on their federal taxes.

For 2018, the total property tax deduction is cut off at $10,000.

It pays to own a home, and you can take full advantage of it come tax season.

*Premier Mortgage Resources does not provide tax, legal or accounting advice. This material has been prepared for educational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Individuals should consult with licensed tax, legal and accounting advisors before engaging in real estate transactions.

Related News

5 signs it might be time to own instead of rent a home

5 signs it might be time to own instead of rent a home

If you are deciding whether to buy or rent a home, there are several signs that can help you make the decision. By looking for these signs, you may be able to determine if it is the right time for you to purchase a house instead of renting one. Here are 5 signs it...

5 tips for upgrading your home’s porch

5 tips for upgrading your home’s porch

Not only will upgrading your porch improve the overall look of your property, but modernizing it may also add value to your home and increase its marketability. Here are five upgrades to consider to your porch. Install Modern Lighting Installing modern lighting on...

6 Things To Do In The First Month In Your New Home

6 Things To Do In The First Month In Your New Home

Your first month in your new home is an exciting time. There is so much potential for your future. While you are busy making your new home "yours," however, there are some key things to keep in mind. Here are six tips for what you should do in your first month in your...