When tax season rolls around, your house becomes much more than the abode that you call home. It is a sitting stack of potential deductions that are waiting to be explored, analyzed and taken advantage of. Sadly, far too many people overlook the large number of deductions that they would be eligible for simply due to the fact that they are unaware of their options.
Deductions are hard to decipher on your own, but with the help of a professional like the tax experts at MBS Accountancy you can find deductions that are applicable to you—and take advantage of all that your house has to offer.
Are you ready to figure out what deductions your home is hiding? Here are the top 10 deductions for homeowners:
- Mortgage interest: If you are like two-thirds of American homeowners, then you have a mortgage payment that you make every month. The interest that you pay on your home loan is tax-deductible.
- Points on Closing Costs: Did you purchase your home this year? In certain situations points paid at closing are tax-deductible.
- Refinancing Costs: Refinancing an existing home loan is a popular practice right now. Any points paid through mortgage-refinancing are potentially eligible for a deduction.
- Private Mortgage Insurance: If you are paying private mortgage insurance or PMI, then you may be eligible for a deduction on this count. However, there are several restrictions that your tax specialist will discuss with you.
- Capital Gains: Capital gains on home transference are tax exempt in most cases. This is true for a single individual up to $250,000 and for married couples up to $500,000—as long as you’ve lived in the sold property for a minimum of two of the last five years.
- Home offices: If you work from home, then you can potentially deduct up to a quarter of the expenses associated with the upkeep of a qualified office space, including utilities like electricity and internet access.
- Healthcare Renovations: Medically driven home improvements are often tax-deductible. This may include items like ramps, doorbells or new lighting that will help a disabled member of the household experience enhanced quality of life.
- Vacation Property: Who said vacation is no work and all play? You may be able to deduct portions of your vacation property taxes, mortgage interest and real estate taxes.
- Relocation: Did you move for work-related reasons this year? Those who purchase a new home due to a transfer from work are sometimes eligible for deductible over the portion of their home used for business purposes. You may also be able to deduct certain moving expenses.
- Property taxes: In many states property and real estate taxes can be deducted against your income taxes.
The applicability and details of each of these deductions will vary slightly depending on your individual circumstances. While many of these deductions are available to a large number of homeowners, not all homeowners will qualify for each of them. Your tax specialist at MBS Accountancy will walk you through the details so that you can maximize your deductions without running into any pricey mistakes on your taxes this year.