Homeowner? Find Out What You Can Deduct from Your Taxes
Typically, many new homeowners aren’t aware of all of their newfound tax deductions and credits. It’s certainly something to take advantage of as owning a new home will require a grand amount of financial responsibility.
Here a list of things homeowners can deduct from their next tax filing:
Property Taxes –
You should get a statement from your county that states how much you owe in property taxes. However, if you’ve taken out a loan, many banks design home loans so that the homeowner has an escrow account where a percentage of your monthly mortgage is placed in that account to pay for property taxes. At the end of the year, if the amount of taxes stored in escrow exceed the amount owed, then the remaining amount is mailed back to the homeowner. It will only be the amount paid toward property taxes that can be written off on your taxes.
Energy Efficient Tax Credit –
The money spent on any type of energy efficient appliance can be written off. Depending on the type of appliance, oftentimes only a percentage of the money spent can be written off. Different terms apply. Other than appliances, other energy-efficient equipment such as solar panels, energy-efficient windows, metal roofs, insulation, and the like all apply. Additionally, renewable energy like sun and solar powered wind make you eligible for a tax credit. It’s highly advised to consult a tax professional for the specifics.
There are instances where you may have purchased the dwelling of the home, but not own the property. In such cases, you’d be obligated to pay the owner of the land rent, commonly referred to as ‘ground rent’. If you are in a mortgage or land contract where you’re obligated to pay ground rent for approximately 15 years, you will be able to write that full amount off. It’s very similar to renting a house or apartment and being able to write your monthly rent expenses off. In the case of ground rent, you wouldn’t be able to write off the principle that you paid toward the dwelling.
Mortgage Interest –
Whatever amount of money you’re paying in interest on your mortgage loan is the amount that you’ll be able to write off on your taxes. Your bank will provide you with an annual statement of how much you’ve paid in interest. If you have not received that statement before the end of January, simply give your bank a call and they will provide the information to you.
Home Office –
The good old office deduction. While you won’t be able to deduct a certain amount, you will be able to get a tax credit if you’re managing a legitimate business. If you have a company car, you’ll also be able to write off the mileage. Business expenses such as travel, food, and lodge can also be written off. Here again, it’s strongly recommended to consult a professional tax professional to ensure that you’re getting the most out of your tax refund, because there are certain stipulations that apply.
Contact a Success Tax Relief
professional to find out what other kinds of deductions and credits you can take advantage of at 877