Homeowner tax savings are due to come around. You’re probably rummaging through your things just to gather all the documentation you have for tax deductions so that paying taxes wouldn’t be too big of a burden for you. If you’re looking for something that can give you a significant tax break, do you know what you need to do? Make being a certified homeowner work for you.
There are actually plenty of homeowner tax savings opportunities; just make sure that you’re thoroughly organized and that you conduct proper research to secure as big a tax break as possible.
To further assist you with this goal, here are five of the best aspects to look into that can lead to homeowner tax savings.
- Construction loan interest – If you have taken out a construction loan to build a home, there’s a chance that you can actually have the interest deducted from your taxes.
- You’re likely to qualify if the home you got a construction loan for is one you live in, or it’s a vacation home that you don’t use for business.
- You’re only eligible for this deduction two years after you’ve made the loan—it’s not going to extend beyond this time period.
- Home improvement loan interest – This is similar to construction loan interest except for the bit that the loan was made for renovations that increase the property’s market and functional value. Renovations must be capital improvements such as:
- Replacing an old HVAC system
- Extending your home to accommodate a garage
- Creating a deck (this is considered an increase in functional space)
- Home office – A deduction for homes that have space where business is conducted is only allowed if it’s established that the home office is the principal place of operations or storage for business products.
- Mortgage insurance premiums – These also may be deducted if they were for the private mortgage insurance of the home you live in or your vacation home that’s only used for personal purposes. To learn more about this, you can speak with your mortgage broker or a tax adviser.
- Selling costs – If you had sold your old home in the previous year, you have the chance to lower your income tax by the costs of the sale. These typically include the repairs carried out, broker’s fees, advertising, and title insurance. There are some stringent policies to the accommodation of repair costs, though, so do inquire if those will be counted.
There are still a few other provisions for tax deductions such as points, property taxes, and mortgage interest paid at settlement that all homeowners can look into. If you wish to know them all better, seek the help of knowledgeable professionals. They’ll lend their extensive knowledge to educate you and their guidance will definitely score you some savings on your homeowner tax savings.
