Tax tips for homeowners

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Becoming a homeowner presents a distinct shift from renting, offering not only the advantages of building equity and exclusive property ownership but also access to valuable tax benefits. Familiarize yourself with these potential advantages before the next tax season rolls around.

1. Energy Efficiency Credits:

  • Capitalize on tax credits for energy efficiency upgrades made possible by the Inflation Reduction Act of 2022.
  • Qualifying improvements include HVAC system upgrades, insulation additions, and solar panel installations.
  • Retain receipts to claim a federal tax credit, allowing for a 30 percent credit on project costs, up to $1,200, with an additional $150 credit for a home energy audit.
  • Heat pump installations also qualify, with a potential credit of up to 30 percent of project costs, capped at $2,000.

        2. Deduct Home Office Expenses:

        • Self-employed individuals working from home can deduct home office expenses, even without itemizing deductions.
        • Eligible expenses encompass office furniture, printers, scanners, computer monitors, maintenance, mortgage interest, and insurance.
        • Renters in a similar work situation can also deduct their rent.

            3. Deduct Home Equity Loan Interest:

            • Deduct interest paid on a home equity loan or line of credit, provided the funds are used to improve the existing home or purchase a new one.
            • This deduction requires itemizing and applies to qualified residential loans up to $750,000.

              4. Mortgage Interest Deduction:

              • Itemize deductions to benefit from the deduction of mortgage interest payments made throughout the year.
              • Deduct interest on mortgage debt up to $1 million, with variations based on the loan origination date and marital status when filing.

              As a homeowner, taking advantage of these tax breaks and deductions can result in significant annual savings, contributing to a financially advantageous homeownership experience.

               

              Source: Moultrie News

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