As a homeowner, you’re entitled to a handful of tax deductions. All you need to do is take advantage of them—but first, you need to know what they are.
- Mortgage interest. All of the interest you pay on your mortgage is tax-deductible, as long as your loan is under $1 million.
- Points. If you’ve paid points to secure a lower interest rate, you can fully deduct them when you do your taxes.
- Property taxes. If your lender holds your property taxes in escrow for you, you can’t deduct that money until it’s actually used to pay the taxes. However, they’re generally due annually—and that’s when you can.
- Home office and home business benefits. If you use part of your home to conduct business (and only business), you might be able to deduct the costs for just that portion.
- Moving costs. If you had to move for work, you could be eligible to deduct some of those costs on your taxes. However, you have to meet strict IRS requirements before you can claim moving costs, so it’s best to consult with a professional first.
- Mortgage tax credit. Low-income, first-time homebuyers may benefit from a credit of up to 20 percent of the mortgage interest payments. Double-check your eligibility by reading IRS Publication 530, which outlines all of the requirements to qualify.
There isn’t a one-size-fits-all tax break list, and you may not qualify for all of these benefits. This list isn’t intended to be actual tax advice; you should always talk to a tax professional to get case-specific guidance that matches you situation.
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