Homeownership tends to come with benefits. But some of the most appealing (at least financially speaking) are the tax perks.
Once you become a homeowner, you qualify for a number of deductions, credits and other tax breaks you couldn’t have previously, and they could save you a significant amount of money — or result in a bigger refund.
Are you a new homeowner or thinking of buying a home this year? Here are some tax benefits you have to look forward to:
- Mortgage Interest Deduction: As long as you itemize your returns, you can deduct the interest you pay on up to $750,000 in mortgage loans.
- Energy Update Credit: Making your home more energy-efficient can also qualify you for various tax incentives. You can check online to see what you may be eligible for.
- Home Office Deduction: If you’re working from home, you can also write off home office costs. There are some caveats to this one: It must be an area exclusively used for work, and it needs to be your principal place of business. Talk to your tax preparer to make sure you qualify.
- Capital Gains Exclusion: When you sell your home, you don’t have to report the profits as income, as long as those profits fall under $250,000 (if you’re single) or $500,000 (if you’re a couple).
- Property Tax Deduction: You can also write off your property taxes up to $10,000. Much like mortgage interest, you have to itemize your returns to do so.
Depending on your situation, you may be able to take advantage of other tax benefits. Be sure to talk to an accountant or tax planner for guidance.
Not yet a homeowner but ready to take the leap? Reach out for mortgage preapproval today.