Tax Tips for Every Homeowner

Everyone’s favorite season is here! TAX SEASON! Looking forward to a substantial refund? Got your eye on that perfect she-shed for your backyard or are you more of a giant widescreen TV for the summer Olympics kinda family? Before you start bookmarking e-commerce sites, don’t forget to consider these important housing-related deductions and credits, while you’re getting your 2023 tax documents in order.

HOME INTEREST DEDUCTIONS

Mortgages that closed before December 16, 2017: A married couple filing jointly and single filers can deduct mortgage interest on a combined debt limit of $1 million dollars.

Mortgages that closed after December 16, 2017: For both primary residences and secondary home loans, married couples filing jointly and single filers can deduct mortgage interest on a combined debt limit of $750,000.

PROPERTY TAX DEDUCTIONS

Taxpayers who itemize can deduct up to $10,000 as a married couple filing jointly or $5,00 for those who are single or married, filing separately, on a combination of state and local property, income, and sales taxes. This applies to property taxes on your primary residence, a vacation home, and even undeveloped land.

CAPITAL GAINS TAX EXCLUSIONS

Certain home improvements, such as energy efficient windows, doors, solar panels and HVAC systems may be eligible for tax credits. Check IRS guidelines to determine how much you can claim as a credit.

DEDUCTIONS FOR SMALL BUSINESS OWNERS

Home Office Deduction: If you use part of your home exclusively and regularly for business, you may be able to deduct expenses such as mortgage interest, insurance, utilities, repairs, maintenance, and depreciation.

Real Estate Taxes: The business portion of your real estate taxes can be deductible.

Mortgage Interest: If you have a mortgage on the property used for business, the interest may be deductible.

Rent: If you rent your home and use part of it for business, that portion of the rent is potentially deductible.

Casualty Losses, Maintenance, and Repairs: Costs incurred due to casualty losses, maintenance, and repairs for the business part of your home might be deductible.

Remember, to claim these deductions, specific requirements must be met, such as the exclusive and regular use of part of your home for business purposes. It’s also important to note that there are limits and qualifications for these deductions, so consulting with a tax professional or referring to the IRS guidelines is advisable for your specific situation.