Tax Deductions for Homeowners
Buying a home is a big deal and is one of the best concrete investments that you can make. Beyond that, your home is where you spend the most time and where you make so many cherished memories with your family. The tax code in America is built in such a way to support and reward homeowners with deductions and money saving opportunities. If you have already bought a home, or are on the fence about buying one, there are some fantastic tax deductions for 2017 that can help you save your hard earned income. While this post is intended to be educational and informative, for the best guidance you should sit down for a free consultation with Colonial Tax Consultants to discuss your unique situation.
Mortgage Interest Deduction [if !supportLineBreakNewLine] [endif]
The first big tax deduction virtually all homeowners in the United States are able to take advantage of is writing off mortgage interest. When you purchase a home, the amount of interest you pay on the loan depends on a variety of factors, but you are able to deduct that interest on up to $1 million dollars in loan value. More often than not, your home loan can be a big financial burden and these tax breaks are designed to give you a reprieve simply for being a homeowner. Home Purchase Points Deduction [if !supportLineBreakNewLine] [endif]
Banks will often assign a points system to loans you can leverage to purchase a home. In other words, the more points you pay to the bank the better the interest rate will be. One point usually equals %1 of the loan value. This tax deduction only works for new homeowners however, since the expense is only deductible in the year you purchased the home. Property Tax Deduction
In most cases your property taxes are deductible, and that deduction is most commonly used by homeowners in the US. In addition, Military and members of the clergy who receive housing allowances are even able to write off their real estate taxes and home mortgage interest. Property tax deductions depend heavily on where you live, so make sure to consult the main IRS website to see what you may qualify for in your local area. Casualty Losses deduction [if !supportLineBreakNewLine] [endif]
The casualty losses deduction applies if you have suffered severe property damage but were not reimbursed by an insurance company for repairs made after the event. The most common cause of property damage is weather; be it flooding, fire, or wind, but it can also be vandalism and intentional damages to your property caused by another party. To take advantage of this deduction the loss must exceed 10% of your gross income. If you find yourself in this unfortunate situation, keep careful records of your repairs and expenses throughout the recovery process. [if !supportLineBreakNewLine] [endif]
Filing your taxes and working through a list of possible deductions can be a tedious process and more than a little confusing. Colonial Tax Consultants are here to help make the experience of filing your taxes as smooth and as clear as possible. Contact us today for a free consultation!