Top 5 Homeowner Tax Breaks
Some people might argue that owning a home, whether it is built from the ground-up, a historical piece of property, or a condo, is nothing more than a money pit. True, homeownership is a great responsibility, but it is one that once acquired, is a liability that people take pride in!
The Weight of Responsibility
Still, responsibility is just that. If you choose to be a homeowner, one of the most important responsibilities requires keeping up with the taxes associated with owning property. The two main tax responsibilities for a homeowner include paying the interest on the mortgage, if he or she chooses to finance and paying the annual property taxes that, depending on which state you reside in, can sometimes be paid quarterly or bi-annually.
Homeownership isn’t all about money going out. There is a time of the year where homeowners are able to get a tax break based on the amount of interest and property taxes they have paid. Here is a list of the top 5 homeowner tax breaks that you as a proud property owner can take advantage of:
- Buying a Home
First off, buying a home will give you a generous tax break. Let’s face it, buying a home isn’t cheap! After the hefty expense of paying for a home, it could be said that one can certainly use a tax break! The only exception here is that this little tax break applies to first-time homeowners. A first-time homeowner reportedly is allowed to borrow up to $10,000 from their IRA account without any tax penalties.
- Property Taxes
There is another first-time home buying program called the Mortgage Credit Certificate Program where, in the state of Florida, homeowners can claim up to 50% of their paid mortgage interest on their Federal Internal Revenue taxes every year. If you don’t qualify for this, don’t worry. Property taxes are deductible and can be recorded as such on your annual tax filings. However, any money that is held in escrow cannot be counted as taxes paid because those funds technically haven’t been paid as such yet.
- Interest Paid on Mortgage
For seasoned homeowners, any interest paid on your mortgage loan throughout the year can be counted as a tax deduction. Your mortgage company will send you a form at the beginning of the year stating the annual amount of interest paid for that tax year.
- Late Gratification on Home Improvement Expenses
Any expense toward exterior or interior home improvement, whether it is aesthetic or structural-wise cannot be counted as a tax deduction. However, if done wisely, the amount of money invested into a property can be made back when selling the property. Sometimes, the improvements made can increase the property value.
- Home Office
Having a home office is one of the more recognizable tax write-offs. Here, it is simply a matter of sectioning off a part of your home and dedicating it to a business. In order to qualify for a home office deduction, one must adhere to the IRS standards.
More to Know!
You now have the top 5 tax breaks, but there are many more tax deductions for homeowners. Even renters have opportunities for tax breaks. If you are interested in knowing what they are, contact Success Tax Relief online or by email, and we will be more than happy to answer any questions you may have. You can also call us at 877-825-1179.