Write-offs Uncle Sam Wishes You’d Forget

As a homeowner, you can benefit from some tax breaks that can make your home more affordable, with thousands of dollars shaved off from your IRS bill each year. It’s a benefit I like to remind you about!

Read over the list below to see what could pertain to your situation. And, no matter what, please remember to always consult with your tax advisor.

Mortgage Interest

Interest paid on home loans is deductible up to $1 million for a principal residence plus a second home. You’ll need to itemize your income taxes in order to claim this. Don’t just fill out the 1040-EZ without doing the math first to see whether itemizing or the standard deduction will result in the lowest tax bill – or highest refund – for you.

Property Taxes

Property taxes on all real estate are fully deductible. When you buy a home, check the settlement sheet to see if you reimbursed the seller for property taxes he or she prepaid for a period you actually owned the home. If so, include that amount in your property tax deduction.

Credit for Green Improvements

Not a tax break but a credit. It allows homeowners to take up to $500 off their federal income tax for making certain improvements that increase the energy efficiency of their homes, such as solar panels, water heaters, furnace, boiler, heat pump, windows or roofing. 

Investment Property/Rental Property

The cost of maintaining and marketing a rental property can be deducted from the income the property generates, without regard to the owner’s tax status. These expenses include mortgage interest payments, insurance, utilities, maintenance, repairs, advertising costs and management fees, as well as the non-cash cost of depreciation.

Home Office

You can deduct the costs of a home office that you use exclusively as your principal place of business.

Tax-free Rental Income

If you rent out your own home for 14 or fewer days during the year, the rental income is tax-free.

Be sure you are taking advantage of all the write-offs Uncle Sam wishes you’d forget for which you are eligible.  If you would like a recommendation for a CPA or accountant, please let me know!  

Also, if you’re in the market for a brand new Colorado Home, be sure to check out my article on How to Buy and Sell at the Same Time and my YouTube Channel where you will be able to tour lots of great new builds in the Denver Metro Area.