Whether you’re prepared for it or not, tax season is officially upon us. While everyone hopes to receive a sizable tax return, many people don’t realize that as a homeowner there are a number of home-related expenses you may be able to deduct when it comes time to sit down and file your taxes.
Here are just seven of the many home ownership-related tax deductions you should look into or speak to your professional tax preparer about before you officially file.
- Contrary to what many homeowners believe, the IRS does allow you to deduct certain mortgage-related expenses, including real estate taxes, home mortgage interest, and mortgage insurance premiums.
- If your job permits you to work from home, you may be able to deduct a percentage of your rent or mortgage, depending on whether or not you meet the strict eligibility requirements.
- If you moved to a new home at least 50 miles away to accept a new, full-time job in the same industry as you were in before the move, you can deduct some of those moving expenses.
- Certain home products, like ENERGY STAR® rated appliances, may be tax-deductible. When purchasing new products for your home, look closely for the ENERGY STAR label to make sure the product you want is eligible for the tax credit. Not only will you save money on your taxes and a monthly utility bill, but you’ll also have peace of mind knowing you’re doing your part to minimize your carbon footprint.
- Home improvements, according to the IRS, refer to jobs that either prolong your home’s life or add value to your home. Examples include plumbing, wiring, remodeling, putting in new carpet, replacing the roof or anything else that will add beauty and improve your home’s resale value. You won’t be able to deduct the costs of these home improvement projects directly, but you can deduct the money you paid for materials and labor.
- Certain home improvements can be deducted as medical expenses if you can prove the changes were medically necessary. Installing exit/entrance ramps, modifying bathrooms, widening doors/hallways, adding handrails and lowering sinks/cabinets are all examples of home modifications you may be able to deduct as medical-related expenses.
- Believe it or not, there are a number of tax benefits available to those who purchase a brand new home. If you’ve been contemplating moving for a while, now may be the perfect time to make it happen.
For more information about home-related tax deductions, you may be able to take advantage of, contact your professional tax planner or visit the IRS’s online deductions page.
To speak with one of Eastern Title & Settlement’s friendly, knowledgeable specialists about an upcoming real estate transaction, purchase agreement, land title or virtually any other real estate needs you may have, contact us online. We look forward to answering all your questions, helping you avoid as many obstacles as possible and ensuring the success of all your upcoming real estate transactions.