Tax Tips For Homeowners
Tax season is here and there are a lot of great perks for homeowners. Here are a few tips that will help elucidate a few points.
If you use your home office space exclusively and regularly for business, you can claim a home office deduction. Simply multiply the square footage of the space (up to 300 feet) by $5 to reach a dollar deduction amount.
Don't consider the cost of moving a total loss. If you relocated for a new job, you can write off quite a bit of your travel expenses for the trip. You can only deduct moving expenses if it's for a new job and you have to meet some specific requirements. If you meet them, you can take a whole host of deductions.
Sell! Sell! Sell!
Selling your house has some advantages. If you advertised your sale in any way or bought title insurance, you can write it off. However, if you make under $250K ($500K for married couples) in profit from the sale, it's not taxable. You will have to live in the house for at least two out of five years of ownership to qualify.
Property Taxes Are Deductible
On your federal tax return, you can claim any state and local property taxes you pay. You pay these taxes with every mortgage payment. They go into escrow, where the mortgage lender pays them once a year. On your yearly summary, you can find the cost of property taxes for listing. Remember – this only applies to those itemizing their deductions. If you take the standard deduction, you're out of luck.
Mortgage interest is entirely deductible and might make a heftier tax credit than the standard deduction. However, you can only begin writing off expenses after you reach 2% of your adjusted gross income (AGI).