{"id":3843,"date":"2019-03-25T09:00:00","date_gmt":"2019-03-25T13:00:00","guid":{"rendered":"https:\/\/staging.migonline.com\/blog\/?p=3843"},"modified":"2019-03-22T13:27:17","modified_gmt":"2019-03-22T17:27:17","slug":"being-a-homeowner-has-multiple-tax-benefits","status":"publish","type":"post","link":"https:\/\/migonline.com\/blog\/2019\/03\/25\/being-a-homeowner-has-multiple-tax-benefits\/","title":{"rendered":"Being a Homeowner Has Multiple Tax Benefits"},"content":{"rendered":"<p><strong>Being a Homeowner Has Multiple Tax Benefits <\/strong><\/p>\n<p>It&#8217;s tax season once again. Ready or not, we are required to file income taxes. If you have just become a homeowner, or have been one for years, you can take advantage of\u00a0various tax breaks that help ease your tax burden.<\/p>\n<p>Here are some\u00a0ways homeowners can use tax breaks to decrease the amount of taxes they are charged.<\/p>\n<ol>\n<li><strong> Mortgage Interest<\/strong><\/li>\n<\/ol>\n<p>Your monthly mortgage payment is made up of principal and interest. By itemizing\u00a0your taxes, you may be able to\u00a0claim all of\u00a0your\u00a0mortgage interest as a\u00a0deduction. For example, if\u00a0your mortgage debt is\u00a0$750,000 or less, you&#8217;re\u00a0able to deduct the\u00a0entire amount you paid in interest\u00a0in the year prior. If your\u00a0mortgage\u00a0originated before December 15, 2017, you can deduct the interest on up to 1 million dollars of mortgage debt.<\/p>\n<p>Depending on your mortgage rate and term, using your mortgage interest as a tax break may save you hundreds of dollars owed.<\/p>\n<ol start=\"2\">\n<li><strong> Home Equity Lines of Credit\u00a0(HELOCs)<\/strong><\/li>\n<\/ol>\n<p>HELOCs\u00a0were once more widely accepted as tax breaks, but there was a change to the tax laws with the\u00a0<u><a href=\"https:\/\/www.fool.com\/taxes\/2018\/01\/03\/whats-in-the-final-version-of-the-tax-cuts-and-job.aspx\">Tax Cuts and Jobs Acts of 2017<\/a><\/u>. Until then, homeowners were able to\u00a0deduct interest on\u00a0a\u00a0HELOC debt that was used for any reason.\u00a0There are two key changes affecting\u00a0how homeowners can now\u00a0use\u00a0HELOC debt as tax breaks.<\/p>\n<ul>\n<li>The HELOC debt must be used to finance a home renovation to be used as a tax break.<\/li>\n<li>The amount of the HELOC must be added to the mortgage debt, and together they must equal $750,000 or less.<\/li>\n<\/ul>\n<p>Even with the changes, HELOCs\u00a0may still be able to save you a bit on your taxes this year.<\/p>\n<ol start=\"3\">\n<li><strong> Property Taxes<\/strong><\/li>\n<\/ol>\n<p>This is the one time a year when homeowners may be grateful for their area\u2019s high taxes.\u00a0City and county taxes can be used as deductions when filing your taxes if you itemize your expenses. The limit on this tax break is $10,000. This break offers a bit of relief, especially\u00a0if your home is located in an area with\u00a0high taxes.<\/p>\n<ol start=\"4\">\n<li><strong> Mortgage Discount Points<\/strong><\/li>\n<\/ol>\n<p>Sometimes homeowners opt to\u00a0<u><a href=\"https:\/\/www.houselogic.com\/finances-taxes\/taxes\/mortgage-points-deduction\/\">buy points<\/a><\/u>\u00a0during the mortgage process in order to lower their mortgage rate. You may be able to deduct the money you spent on these points.\u00a0Be warned that there are several rules about using mortgage discount points as a tax break, such as the points must be paid directly instead of with your loan, and they must be calculated as a percentage of your mortgage. Ask your CPA if you qualify for this tax break.<\/p>\n<ol start=\"5\">\n<li><strong> Home Office<\/strong><\/li>\n<\/ol>\n<p>Working from home may offer you a tax advantage. In\u00a02018, claiming a\u00a0<u><a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/home-office-deduction\">home office<\/a><\/u>\u00a0as a tax break got more difficult, but it&#8217;s still possible. You must use your home office as your primary workspace, and employees must meet additional tests that self-employed workers don&#8217;t.<\/p>\n<p>If you qualify, you can deduct your home office space as a percentage of your home. For example, if you have a 2000 square-foot home and your home office is 200 square-feet, you can deduct 10% of your insurance,\u00a0homeowner&#8217;s associations fees, utilities, and other expenses related to your home.<\/p>\n<ol start=\"6\">\n<li><strong>Energy Efficiency<\/strong><\/li>\n<\/ol>\n<p>Going green and reducing your carbon footprint can save you money on your tax bill. The government has put several credits in place for homeowners who make energy-efficient investments in their home. Installing\u00a0solar panels and solar-powered water heaters to turbines and using fuel cells that rely on a renewable resource all rate as a tax credit under the\u00a0<u><a href=\"https:\/\/www.energy.gov\/savings\/residential-renewable-energy-tax-credit\">Residential Renewable Energy Tax Credit<\/a><\/u>. Tax payers can use up to 30% of the cost of the energy-efficient upgrade,\u00a0including installation, as a tax deduction.<\/p>\n<p>Nobody wants to pay more taxes than they\u00a0should. Understanding how to use your home for tax breaks can be confusing.\u00a0Luckily, being a homeowner offers distinct tax advantages\u00a0that renters don&#8217;t get to use. Educating yourself is the first step in making certain you&#8217;re\u00a0using the maximum amount of tax breaks owed to you. Be sure to talk to your accountant about the terms of your mortgage, your taxes, and any upgrades you&#8217;ve made to your home to make it more energy efficient.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Being a Homeowner Has Multiple Tax Benefits It&#8217;s tax season once again. Ready or not, we are required to file income taxes. If you have just become a homeowner, or have been one for years, you can take advantage of\u00a0various tax breaks that help ease your tax burden. Here are some\u00a0ways homeowners can use tax &hellip; <a href=\"https:\/\/migonline.com\/blog\/2019\/03\/25\/being-a-homeowner-has-multiple-tax-benefits\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Being a Homeowner Has Multiple Tax Benefits<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":3844,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52,80],"tags":[],"class_list":["post-3843","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home","category-tax-breaks"],"_links":{"self":[{"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/posts\/3843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/comments?post=3843"}],"version-history":[{"count":1,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/posts\/3843\/revisions"}],"predecessor-version":[{"id":3845,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/posts\/3843\/revisions\/3845"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/media\/3844"}],"wp:attachment":[{"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/media?parent=3843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/categories?post=3843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/migonline.com\/blog\/wp-json\/wp\/v2\/tags?post=3843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}