It’s that time of year again: tax season. Although filing can be daunting, there is some good news for homeowners. Homeowners can take advantage of some tax credits! The one deduction homeowners know well is that they can get an income tax deduction on the mortgage interest they pay. But that’s not the only credit homeowners should be taking advantage of!
- Property taxes. You won’t receive a 1098 for these taxes but they will be listed on the settlement sheet.
- Mortgage interest rate on your primary residence, and possibly your second residence (there are limits).
- Interest on up to $100,000 borrowed on a home equity loan or home equity line of credit.
- Points you paid when you purchased the home.
- The premiums paid for Mortgage Insurance Premiums, but only for policies issued after 2006.
- Home improvements required for medical care.
- If you use a portion of your home exclusively as a home office, you may be able to claim a deduction for repairs, insurance and depreciation.
- First-time homebuyers qualify for a credit of 10% up to $8,000. There are restrictions to this, so be sure you understand if you qualify.
- If you’ve replaced your doors or windows you may be able to claim 10% of the cost up to $500 or a specific amount from $50-$300. The Energy Star website offers more information on other energy saving home credits you may be eligible for.
- Debt canceled from the short sale, foreclosure, or mortgage modification for Qualified Principal Residences can be excluded from income under the Mortgage Forgiveness Debt Relief Act.
While you’re gathering all the documents required for filing taxes, don’t forget to include the documents for anything from above that applies to you. And don’t forget to file by April 15, 2016!
Do you have questions for Berkshire Hathaway Home Services Towne Realty?
Let us know via our Contact An Expert form or on Facebook or Twitter.
The information contained in this article is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. Presentation of the information via the internet is not intended to create, and receipt does not constitute, a tax planner-client or financial-planner-client relationship. Internet subscribers, users and online readers are advised not to act upon this information without seeking the service of a professional tax and/or financial planner.
Sources: Thinkstock, TurboTax, FindLaw, EnergyStar, IRS