Get the Homeowner Tax Breaks You Deserve!
It’s April, and tax day is around the corner. Have you filed yet? We know that doing your taxes is a major pain, but sometimes it can be exciting!
What could be fun about taxes, you ask? Tax breaks! A tax break is when the government offers you a deduction on your taxes and in turn, your tax liability decreases.
With the housing market slowly rising, more and more individuals are becoming first-time homeowners, or even investing in secondary properties. Homeownership is a huge step, and something to be proud of — plus, it comes with a ton of those tax breaks we’re talking about!
(Not a homeowner? Check out the real estate in Birmingham, Alabama — if not for the tax breaks alone!)
Now, in order to get these tax breaks, you need to know how to find them, and your taxes might take a little longer — but, trust us. It’s worth it! Let’s take a look at all of your options!
#1: Mortgage Interest
The first tax break you will want to look at is how much interest you have paid on your mortgage. Your lender will send you Form 1098 — a document stating all your interest paid. Your total interest is tax deductible up to $1 million!
#2: Property Taxes
Unless you are receiving a partial refund on your property taxes, property taxes are almost always fully deductible. If you are paying these taxes from an escrow account, you can only claim deductions on the money already pulled from the account to pay for property taxes.
#3: Home Improvements
Homeownership comes with a lot of work. As a homeowner, you are in charge of having to fix anything that goes wrong, from the plumbing to the yard work. These basic responsibilities cannot be deducted from your taxes, but improvements can. If you take out a loan to make home improvements, if that home improvement (like the addition of a bathroom) adds value to your home, you can deduct the interest from your loan.
#4: Working from Home
Are you someone who primarily works from home? If you have a dedicated office in your home that you use to carry out your daily work, you may qualify for deductions. The deductions include expenses ranging from utilities to insurance — just make sure you fill out the information regarding your space very accurately, and review all your qualifications.
#5: Going Green
The government wants to reward you for trying to live a more energy efficient life! If you make improvements on your home that reduce energy, you could qualify for a tax credit. In many cases, you could save up to 30% of your total energy efficient upgrade costs!
These are just a few of the many tax breaks at your fingertips. We highly recommend doing intensive research, or hiring a professional, to help you gain all the tax breaks you deserve.
Speaking of professionals, if you are looking to invest in real estate in Birmingham, Alabama, you should consider hiring a real estate agent. Don’t just hire the first real estate agent that pops up on Google; do your research. Learn how to choose the best real estate agent for you.
