Looking out for Your Wallet - The Best Homeowner Tax Breaks that You should Know!
Sometimes being a homeowner can seem like more trouble than it’s worth. The endless taxes, mortgage payments, and activities can really take its toll on the stress levels of anyone. Luckily, Uncle Sam realizes that community owning a home can be a tough cross to bear, and is happy to cut you a little slack in the form of tax credits and breaks! Read on to see the 5 best homeowner tax breaks that you should be aware of in 2016.
The Big Homeowner Tax Break – Mortgage Interest Deductions
If you’re like most homeowners, then your mortgage is probably the single largest debt that you have incurred. Generally, so long as your mortgage is below $1,000,000 then you are probably eligible for at least a limited mortgage interest deduction, but you may be eligible for more in certain situations. The fine folks over at TurboTax have a comprehensive guide on mortgage interest deductions that is worth pursuing, but it is always worth checking with a professional if you are unsure of your situation!
Other Homeowner Tax Breaks 2016
Home Improvement Loan Interest
While it is not possible to write of the costs of labor and materials associated with home improvement, it is possible to write off the interest on a home improvement loan. This interest is deductible up to $100,000 in debt and so long as the loan is not worth more than the value of the house.
Who Benefits: Mostly current, established homeowners ready to take the plunge into the world of home improvement.
Energy Efficient / Renewable Energy Tax Credits
With all the talk of energy independence lately, it is no surprise that the government is offering tax credits to those homeowners who take the first steps towards sustainability. Depending on whether the equipment that you purchase is certified as energy efficient or is classified as utilizing a renewable form of energy, you will be looking at different tax credits, so be sure to confirm before installation!
Who Benefits: Anyone with the means and desire to purchase upgrades. It’s not often that you get to save the planet while, also getting a tax deduction!
Buying a Home
If this is your first time purchasing a home, then you may not be aware that you can take up to $10,000 dollars out of your traditional or Roth IRA penalty free to help with the purchase cost. If you are married, or are purchasing said house with children, grandchildren, parents, or grandparents then they can also take an additional $10,000 to help with the costs.
Who Benefits: Primarily new homeowners and first-time homebuyers, though people purchasing a second home or a vacation home should also take note.
Property Tax and Other Items on Settlement Documents
Property tax is usually tax deductible, but that isn’t true for all the closing costs when purchasing a home! As a general rule, transfer taxes are the only item that can be written off.
Who Benefits: Anyone purchasing a domicile property!
That’s it for this month’s installment of the TitleQuest blog! If you have any questions about any of the breaks and deductions listed above, or would like a reference to qualified tax accountants for the upcoming busy tax season then please contact us through the link, or by phone at 757-962-9844. If you’d prefer to talk in person, then please do not hesitate to contact us at any one of our three convenient locations. With TitleQuest, you get a cut above the rest; remember that, Yes, it matters where you close®!