Being a homeowner comes with many benefits and a rewarding feeling of achievement and security for us and our family. There are also many responsibilities that come from buying our own house, including paying our corresponding taxes. However, we might be able to qualify for several deductions and credits, which is why we decided to share four useful tax tips for homeowners that you should keep in mind during this tax season.
One of the most useful tax tips for homeowners includes deducting our moving expenses. If we suffered from casualty losses, we might be able to deduct some expenses, too. Deducting our mortgage interests and mortgage taxes is another great tip. And for those freelancers who use their home as their office, some expenses could be deducted, too.
Moving to a new location tends to come with many expenses that we must consider beforehand. In addition, the hassle of actually moving our belongings, packing, unpacking, arranging, and rearranging isn’t nobody’s favorite. Luckily for us, though, some moving expenses are deductible on our income tax return. There are, of course, some requirements we must meet in order to be eligible for this deduction. There must be a certain distance from our current workplace to our previous house and the new one to qualify. Having worked full-time for at least 39 weeks of the year is another requirement.
As homeowners, taking care of our property is one of the most important priorities. Making sure it is in good shape is a must. However, unforeseen events can happen, and sometimes these events end up causing great damage to our houses. If we were victims of vandalism or a natural disaster, for example, we might be able to deduct some losses. However, the IRS defines a casualty as an unusual, unexpected, or sudden event.
Being able to deduct our mortgage interests is one of those tax tips for homeowners that we should keep in mind if eligible. Even when the Tax Cuts and Jobs Act modified the deduction, we are still able to benefit from it. We can deduct the interest of any residence loan that goes up to $750,000 if we obtained this loan after 2017. For loans obtained before that year, the limit of the loan goes up to $1,000,000. Also, we should remember this can apply for our first and second mortgage, in case we have more than one.
Last but not least, there is another great deduction that some of us could take advantage of if we work from home. If we are starting or running our own business, using a part of our house to do so will save time and money. Also, the expenses and costs that our house generate as a result of business activity can be deductible. However, we must be self-employed to enjoy this benefit. Because of the TCJA, employees of an established company can’t deduct home office expenses.