With tax season right around the corner, it’s possible you find yourself asking “what tax breaks do I get for owning a home?” These 5 must-know Homeowner tax breaks will help you trim your tax bills and also encourage homeownership.
At Team Lund, we understand that owning your home is a significant financial investment. We also know many people don’t know the tax deductions and credits that they can claim to help offset that cost. Let’s look together at these popular tax breaks and credits to help you see what is available to you. This way so you can decide if you’ll get the most tax benefit from itemizing your taxes or taking the standard deduction.
5 Must-Know Homeowner Tax Breaks
To help you make an educated decision let’s dive into 5 homeowner tax breaks you should include in your calculations during tax season:
How much of your mortgage interest is deductible?
For most homeowners, the biggest tax break comes from deducting the interest paid on their mortgage every year. You can deduct interest on up to $750,000 of debt if you’re married filing jointly or $375,000 if you’re single or filing separately. Of course, this deduction will be the largest in the early years of homeownership when your interest payments are highest.
Can I deduct my home equity loan interest?
You can also deduct interest on your home equity loans and home equity lines of credit. One important note is that this is only if the money borrowed is spent on home improvements. This debt counts towards the total mortgage debt limit for interest deductions.
Do you get a deduction for property taxes?
Homeowners can also deduct up to $10,000 paid on property taxes ($5,000 if filing separately). Depending on the property tax rate where you live, and how much you paid for your home, this could be a substantial deduction for you!
Can I deduct my home office?
Although you can’t claim a home office deduction for remote work, you can claim a home office deduction if you’re self-employed. If you use part of your home, or any outbuilding on your property, exclusively for your business you will want to look into how to claim this tax break.
What home upgrades are tax-deductible?
You may be able to score some tax breaks for certain environmentally-friendly upgrades to your home, such as solar panels and efficiency-efficient updates. Contact your tax professional to find out all that is included and how to claim them.
There are quite a few homeowner tax breaks that may make itemizing your taxes worth your while. While this list gives you the 5 must-know homeowner tax breaks, it would be best to hire a tax professional to guide you through the process of legally maximizing your tax return this year.