Home Maintenance March 27, 2024

Maximize Your Tax Savings as a Homeowner: Key Strategies to Utilize

Coming Soon… and it’s not a new home for sale.  Monday, April 15 is coming quick and the IRS is waiting.  As a homeowner, you have several opportunities to use real estate to your advantage when it comes to taxes. Here are some strategies to consider:

  1. Mortgage Interest Deduction: The interest you pay on your mortgage is tax-deductible. Make sure to keep track of your mortgage interest payments throughout the year. Consult your loan documents or speak with your lender to get accurate figures.
  2. Property Tax Deduction: Property taxes are also deductible. Keep records of your property tax payments, and when you file your taxes, claim this deduction.
  3. Home Office Deduction: If you use part of your home exclusively for business purposes (such as a home office), you may qualify for the home office deduction. Consult IRS guidelines to ensure you meet the criteria.
  4. Capital Gains Exclusion: When you sell your primary residence, you can exclude up to $250,000 (or $500,000 if married filing jointly) of capital gains from your taxable income. To qualify, you must have lived in the home for at least two out of the last five years.
  5. Energy-Efficient Home Improvements: If you’ve made energy-efficient upgrades to your home, such as installing solar panels, energy-efficient windows, or a geothermal heat pump, you may qualify for tax credits. The Residential Energy Efficient Property Credit allows you to claim a percentage of the cost of these improvements on your federal tax return.

Remember, while these strategies can be beneficial, always consult a qualified tax professional before making any decisions. Tax laws are complex and subject to change, so personalized advice is crucial. Your circumstances may also impact which strategies are most suitable for you.

Disclaimer: The information provided here is for general guidance only and should not replace professional advice. Always consult a tax professional to ensure compliance with current tax laws and regulations.