Tax Deductions for Homeowners

As the upcoming tax season approaches, there are possible deductions that can help you save money, especially if you own real estate. Whether you’re a homeowner, landlord, or real estate investor, consider these potential savings avenues with your tax professional:

1. Mortgage Interest Deduction: You can deduct the interest paid on your mortgage for your primary and secondary residences.
2. Property Tax Deduction: State and local property taxes paid on real estate are deductible, up to a limit of $10,000 per year.
3. Home Office Deduction: If you use part of your home exclusively for business, you can deduct related expenses.
4. Rental Property Expenses: Costs associated with managing and maintaining rental properties, such as repairs, insurance, and property management fees, are deductible.
5. Depreciation: You can deduct the depreciation of rental property over time, which accounts for wear and tear.
6. Points Paid on Mortgage: Points paid to lower the interest rate on a mortgage can be deducted in the year they are paid.
7. Energy-Efficient Home Improvements: Certain energy-efficient home improvements, like solar panels, may qualify for tax credits.
8. Home Equity Loan Interest: Interest on home equity loans used to buy, build, or improve your home can be deductible.
9. Casualty Loss Deduction: If your property is damaged or destroyed by a federally declared disaster, you may be able to deduct the loss.
10. Moving Expenses for Military: Active-duty military members may deduct moving expenses related to a permanent change of station.

Making the most of your real estate investments is important to all homeowners and investors. Always consult with a tax professional to ensure you’re maximizing your deductions and staying compliant with current tax laws.