Taxes and home ownership
Home ownership can bring a lot of happiness, along with a great amount of savings, once the time when the house begins building up equity (instead of paying for the rental house) kicks in. You might think that it’s a troublesome process, but the immense tax deductions that come along with home ownership would help you in reducing your bills! See how you will get the benefits of tax deductions for being a home owner.
- Mortgage Interest Tax Deduction: This is the biggest tax break that the home owner gets after purchasing their new house. The interest that you pay for various mortgages could be deducted, thereby allowing you to save a lot of money.Interest paid on mortgages is generally huge in amount, and this deduction can definitely give you a reason to smile. Such deduction is applicable on interest paid on home loan and home equity line of credit.
- Deducting Points: Lenders charge a percentage to home owners to loan them money. This percentage is referred to as points, where one point equals one percent of the loan amount. These points may qualify as a tax deduction. Consult with an accountant or other tax professional to see how you can receive the most benefit when you file your taxes.
- Home Improvement Loan Interest: Getting your home renovated could also help you get a great deduction in taxes. If you go for a loan to remodel or renovate your home then the interest paid on this loan would be deducted from your income taxes. However, it must be noted that normal repair work and minor fixes do not qualify for this tax deduction.
- Home Office Deduction: If you are working from your home and are using a portion of it as your office,then you are eligible for tax deductions on insurance, mortgage interest, or repairs. Make sure that the portion of your home that is mentioned as the office is used exclusively for official work only.
Apart from the above mentioned benefits, a homeowner can get tax deductions in property tax and equity loan interests too.
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