*Last updated February 9, 2018.
We are in the middle of tax season, and we’re sure you want to get the biggest refund possible. Did you know there are deductions you can file just for owning a home? If you’re a new homeowner, consider taking advantage of these tax breaks when you send in your paperwork.
- Mortgage Interest Deduction: Looking at your mortgage statement can be a little unsettling, especially when you realize that a large chunk of your payment is going towards the interest on the loan instead of the principal. The bright side to this is that those interest payments are useful tax breaks to have when you file. Depending on whether you’re a single or joint tax filer, you can deduct interest for mortgage amounts up to $750,000. If you purchased your home before 2017 and have a higher mortgage, the loan cap is $1 million. Refer to the criteria listed in IRS Publication 936, “Home Interest Mortgage Deduction” for more information.
- Home-Improvement Loan Interest Deduction: Did you take out a loan to put up a new fence or finish your basement? You can deduct the interest on the loan with no upper limit. Just make sure that you’re taking out the money for actual home-improvement projects, not repairs. Unfortunately, borrowing the money to fix a leaky roof won’t apply to the deduction. Interest on home equity debt of up to $100,000 may be deducted in 2017.
- Home Office Deduction: If you’re self-employed and have a specific space in your home used only for work purposes, you can claim a deduction against your income. Figure out your tax benefit by calculating how much you annually spend on utilities, internet services, home insurance, etc., and then determine how much of those costs your office accounts for. Write off the net costs as a deduction. For more details on how to calculate your deduction, refer to IRS Publication 587, “Business Use of Your Home.”
- Property Tax Deduction: On average, homeowners spend about $2,000 a year on property taxes. While no one really likes to pay that much, it can serve as a nice tax break. Claim property tax deductions in the year you pay them for an addition to your refund. For example, if you began paying your 2018 property taxes at the end of 2017, you would file those deductions on this year’s tax forms.
With all the money you can get back with these newfound home tax deductions, why not splurge for a more luxurious bathroom? We can help by installing a multi-head shower, Jacuzzi-style bathtub, and more. No matter what bathroom renovations you might have in mind, let Barker and Sons be your go-to for shower and tub replacement in Orange County!
Barker and Sons Plumbing & Rooter is a family owned and operated business that serves Orange County, California. Plumbing services are available 24/7, and a member of the team will personally answer all calls. For more information or to schedule an appointment, call 714-630-8766 today.