What Tax Deductions Are Available If You Already Own a Home?

Owning a home is a dream come true for many people. However, it also comes with a lot of responsibilities, including paying taxes.

home tax deductions

Fortunately, homeowners can take advantage of various tax deductions to help relieve the burden of homeownership.

Here are some of the most common tax deductions available to homeowners.

Table of Contents

Mortgage Interest Deduction

One of the most significant tax deductions available to homeowners is the mortgage interest deduction. This deduction allows you to deduct the interest paid on your mortgage from your taxable income.

Generally, you can deduct the interest paid on up to $750,000 of mortgage debt. However, if your mortgage was taken out before December 15, 2017, you may be able to deduct interest paid on up to $1 million of mortgage debt.

Property Tax Deduction

Another tax deduction available to homeowners is the property tax deduction. This deduction allows you to deduct the amount of property taxes paid on your home from your taxable income. The limit for this deduction is $10,000, which includes state and local property taxes.

Home Equity Loan Interest Deduction

If you have taken out a home equity loan or line of credit, you may be able to deduct the interest paid on that loan. However, the rules for this deduction have changed in recent years.

As of 2018, you can only deduct interest paid on home equity loans if the funds were used to buy, build, or improve your home.

Energy-Efficient Home Improvement Deduction

If you have made energy-efficient improvements to your home, you may be eligible for the energy-efficient home improvement deduction.

This deduction allows you to deduct 30% of the cost of certain energy-efficient upgrades, such as insulation, windows, and doors.

Home Office Deduction

If you use a portion of your home exclusively for business purposes, you may be able to deduct certain expenses associated with that space. This is known as the home office deduction. To qualify for this deduction, the space must be used regularly and exclusively for business purposes.

Moving Expenses Deduction

If you have moved due to a change in employment, you may be able to deduct certain moving expenses. To qualify for this deduction, your new workplace must be at least 50 miles farther from your old home than your old workplace was.

You Have Access to Various Tax Deductions

As a homeowner, you can claim various tax deductions that can help you save money on your taxes. From the mortgage interest deduction to the energy-efficient home improvement deduction, there are plenty of opportunities to reduce your tax liability.

However, it is essential to keep accurate records and consult with a tax professional to ensure you are taking advantage of all the deductions available to you.

Tags: , , , , ,