There’s no place like home — especially at tax time
There’s no place like home — especially at tax time. Here are some of the ways your home can help trim your tax bill:
Mortgage interest. For most people, a portion of each mortgage payment goes toward interest. If you itemize your deductions, and meet certain criteria, your mortgage interest may be tax deductible.
Home improvement loan interest. Did you add a garage to your home? Rebuild that old sketchy deck in the back? If you took out a loan to make a big change to your home, the interest from that loan could be another deduction. The word “improvement” is key. The loan must be for a project that either increases your home’s value or prolongs its life. Make sure you ask a tax professional whether your project qualifies.
Property taxes. Payments made to the cities or other local governments are often tax-deductible for homeowners who itemize their deductions.
Home office. Do you work from home? Ask your tax preparer if you qualify for the home office deduction. This is can be a tricky deduction to get right, however, so it’s important to enlist the help of a professional to see if you qualify.
Moving costs. The cost of moving to a new home could be tax deductible if you meet certain criteria. Like the home office deduction, the deduction for moving expenses is a bit complicated; make sure you consult a tax professional before taking this deduction.