Updated: Dec 18, 2020
When tax season comes around, we all dream about getting a nice refund! Owning a home can help with that. Tax laws have recently changed, but homeowners can still claim multiple deductions this year. Here are 5 tips for homeowners filing their 2017 taxes:
Write Off All Home Loan Interest – Not Just Mortgage Interest
For your 2017 taxes, the IRS considers interest on a mortgage with up to $1 million in debt as tax-deductible. You can also write off interest on a home-improvement loan with up to $100,000 in debt, as well as interest paid on a home equity line of credit.
Be sure to take advantage of these deductions this year, because Congress recently changed the rules. Next year, you’ll still be able to write off mortgage interest for up to $750,000, but home equity lines of credit will no longer be deductible.
Remember To Include Your Property Tax:
Property taxes are almost always deductible. The law has changed for 2018 taxes, and you will only be able to deduct up to $10,000 of combined state and local income taxes and property taxes. Don’t forget to take advantage of the deduction this year!
Save Money On Your Home Office
If you work from home, you can write off expenses for the portion of your home that is used as an office. For example, if 10% of your home is used for work, you can write off 10% of your utility bills, homeowner insurance, homeowner association fees, etc. The best part of this exemption? It doesn’t matter if you are self-employed or if you work at home as an employee. Just be sure that the space you are claiming is used “regularly and exclusively” for business.
Reward Yourself For Going Green
You could qualify for the Renewable Energy Efficiency Property Credit if you’ve installed energy-efficient windows, heating and cooling systems, insulation, solar panels, or other equipment that uses renewable energy. As long as the equipment was in place by the end of December 2017, you can claim up to a whopping 30% of the total cost; including the installation!
Claim An Exemption on Capital Gains (Sellers Only)
Typically, if you earn any money in addition to what gets taxed on your paycheck, that money needs to be reported and taxed at the end of the year. However, when the extra cash is from selling your home, you can claim a Capital Gains Exemption.
While the new tax laws were being figured out, there was a lot of talk about lowering the value of this exemption; but have no fear, you can still claim up to $250,000 as a single person or $500,000 if you are a married couple filing jointly.
Remember, we are never too busy to serve your real estate needs! Reach out if you have any questions about how the new tax laws affect you as a homeowner.
*For tax advice, we recommend hiring a tax professional.