Yes folks, it’s that most wonderful time of the year, birds are singing, trees are budding, the grass is greener, the sky is brighter and…it’s tax time! We’re right there with you. Taxes may not be our favorite spring time activity, BUT there are several advantages to homeownership that can help you keep more money in your “pocket” this year. One of the many perks of homeownership is big tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those breaks! Here’s just a few:
Mortgage Interest Deduction: Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away!
Deductions for Refinancing, Home Equity Loan or Line of Credit: There’s additional tax breaks beyond your home’s first mortgage too! Did you refinance this year, receive a home equity loan or line of credit? Ask your tax advisor how you can take advantage of the deductibles related to equity debts.
Multiple Properties: Mortgage interest on a second home can also be deductible. This can be true even for a boat or RV that has the comforts of home: cooking, sleeping and bathroom facilities. Even if you rent out your second property part of the year you may still be able to take advantage of mortgage interest tax deductions depending upon the amount of time you spend there.
Home Office: There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.
That’s the beauty of homeownership. It’s not only your sanctuary and a place where memories are made, but a great investment that can provide year round benefits, including tax time!!