Buying a home? The thought of making such a huge financial investment might make you feel a little queasy, but did you know you could actually save money on your taxes once you’re a homeowner? That’s right, there are a number of different tax deductions you can take advantage of once you buy a home. Here are some of them:
If you are like the majority of homebuyers, you received a loan from a bank in order to buy your home. But, did you know the interest on your mortgage is tax deductible if you’re married and filing your taxes jointly? Deduct all your interest payments on a loan of up to $1 million and put a little cash back in your pockets.
Home Improvement Loan Interest
Did you buy a fixer upper? Or are you completely renovating your home? If so, you could be in some luck. If you took out a loan in order to make these renovations, you can deduct the interest as long as the renovations are considered “capital improvements” and not just basic repairs. This means the changes you are making to your home must be adding value or extending the life of your home. Some examples of this type of improvement include replacing the roof or adding a swimming pool, since the former extends the life of your home and the latter adds value.
Once you’re a homeowner, you will have to pay an annual property tax on your home, but strangely enough, these taxes are tax deductible as long as you have proof of payment.
Energy Efficient Credits
Have you made any green updates in your home? If you have installed energy efficient appliances, added solar panels, or insulated your home, you may qualify for a tax credit of up to 10% of the cost of these improvements. Save all your receipts and talk to your accountant about how you can take advantage of this homeowner credit.
Did you sell a home before moving into your new one? If so, you may be able to deduct the cost of the real estate agent’s commission, advertising, and title insurance fees. Remember, this only applies to homeowners who have sold their previous home within the last year.
If you had to move to a new home because you were relocated to a new job, you may be able to deduct some of your moving costs. You will only qualify if your new job is 50 or more miles further from your old home than your old job was. If you fit this criteria, you can deduct your travel and transportation costs, and any lodging expenses you may have incurred. If you had to put any of your items in storage during the move, these expenses may be deductible as well.
Want more real estate advice? Get the honest answers that you deserve. Contact our team of real estate experts at Coast 2 Coast Realty who have years of experience helping people buy and sell homes in the Tampa area.