We all know buying and owning a house is expensive. But many first-time homeowners (or soon-to-be homeowners) don’t realize all the ways they can save. Even if it’s not tax season, it’s great to keep in mind all the tax incentives for homeowners that exist.
Property Tax Deductions
Property taxes can cost homeowners an arm and a leg. Fortunately, you can deduct up to $10,000 in property taxes on your return or, if you’re married but filing separately, up to $5,000. This includes the potential to deduct on multiple properties, such as vacation homes, land, and in some instances, even RVs!
One thing to keep in mind: you can only deduct on property taxes you’ve already paid.
Working From Home
There are a number of ways you can save if you work from home. In-home daycare providers, self-employed freelancers or independent contractors, and even those who rent out a room for others can all benefit from this tax deduction!
Here are some important things to note:
- For home offices, you can only deduct if you use this part of your house exclusively, regularly, and as a primary place of business.
- You’ll need to record any expenses that went towards maintaining the office space throughout the year.
- If you’re working from home for another company, this tax incentive for homeowners does not apply to you.
Read up on Publication 587 for all the details.
Home Equity Loan Interest
Took out a home equity loan this year? You can deduct the interest as long as the loan was used appropriately. In other words, as long as it was used to improve your home. If the loan wasn’t used for those exact purposes, that interest can’t be deducted.
Depending on when you bought your home (only works for homes bought after 12/15/2017) and how much you borrowed, there’s a good chance the you can write off some of your mortgage interest. Use NerdWallet’s mortgage interest deduction calculator to see how much you can save.
Have you made the switch to solar panels this year? Good for you. The other great news is that renewable energy earns you a huge tax deduction. You can deduct 26% of your installation costs for solar panels.
Do some research into other tax breaks as well — there are even tax incentives for homeowners with solar water heaters and geothermal heating.
Don’t let the expense of buying a home hold you back
If you’ve held off on buying a house because of the expenses, remember that there are plenty of ways you can save. It’s not just tax incentives that can help, either. You can find some incredible listings through RealtyHive, and since they’re time-limited events, you might save more than you thought. Check out our homes for sale today!