Tax season is closer than we think, and getting started on gathering things together isn’t a bad idea. As a homeowner, new or veteran, there are several things you can claim when you file taxes this year. Things you might not have thought of before.
To make your life a little easier, we’ve compiled some potential tax breaks for you here:
Investing in energy saving appliances or solar power equipment can be claimed. This applies to existing home and new homes for energy efficient equipment and rentals or vacation (second) homes for most solar/wind power equipment. Be sure to ask if you aren’t sure what qualifies. Learn more about saving on energy in your home here.
This only applies to renovations that add to the value of your home, or “capital improvements.” But beware, some renovations might lead to a reassessment, resulting in higher property taxes. Still, if you invested in a new roof or insulation, these can be claimed this tax season.
If you work from home, you are entitled to claiming your home work space on your taxes. This applies if you are using your house or part of your house as a regular and exclusive place to conduct your business. If you use one room as an office, you can deduct that extra room.
Also, you may be able to claim a home office deduction if you use your home to conduct business but still have a location elsewhere. This can include a garage or studio, and these deductions are often based on a percentage, so you must work out the percentage of your home used to conduct business.
A Private Mortgage Insurance policy is one that a homebuyer must take if they cannot meet a 20% down payment on their home purchase. This provides protection to your lender if you default. While this is an extra cost to homeowners, it is something that they can use as a tax deduction.
This deduction applies to any PMIs that were taken out in 2007 through now. It is included in the 2016 payment season, but must be renewed by Congress to continue.
You can deduct any penalties resulting from paying off your mortgage early as interest. Or, you can deduct any remaining OID if your loan or mortgage ends due to refinancing, foreclosure, or payment. You must claim the remaining OID in the tax year when the mortgage or loan ended.
You can deduct real estate taxes if the property you are deducting taxes from is either land, a vacation home, or your primary home. This can be claimed if the tax is consistent throughout property in the community in which you live. It does not apply to rentals property or trash collection, for example.
This all depends on how much you use your second home and whether you rent it out or not. A vacation home includes anything that has a bathroom and areas for both sleep and cooking. This means it can be an RV or even a boat.
This tax deduction is rather complex, so consult an adviser to ensure you are filing for all the right deductions.
If you home is located in an area affected by a national disaster, you are entitled to a tax break. You can visit the IRS website for details related to which disaster situations are eligible for this deduction.
New homeowners can withdraw up to $10,000 from their IRAs, penalty-free, to help with purchasing a home. If you’re withdrawing to help with purchasing a home, you do not have to pay the normal 10% penalty fee that typically comes with withdrawing from an IRA account early.
This deduction applies to anyone who has moved more in order to start a new job. These cost deductions include storage costs, lodging expenses, and transportation or travel. The move must take place close to the start date at your new job, and the new job location must be at least 50 miles further from your old home than your previous job was.
This article is not intended to take the place of professional tax advice.
These deductions might not apply to everybody.
Kayleigh is a content writer with a BA in technical writing/literature and an MA in creative writing. When she’s not at work writing, she’s at home writing, reading, or binge-watching television shows… for research, of course. A big do-it-yourselfer and crafter, Kayleigh loves testing out projects and gifting them to friends and family—all in preparation for when she owns her own home one day and decorates with her own personal creations. Her work has appeared on The Writing Cooperative and as an Honorable Mention in East Meets West American Writers Review.