Tax benefits for homeowners
Owning a home is the American Dream and as a dream, it will provide you with multiple benefits as well as tax breaks. As tax season comes to an end, many homeowners are left with many questions or doubts about how to properly file their taxes and get the most out of the whole process. It’s important you understand the tax deductions available to homeowners and consult a Fort Lauderdale tax attorney to navigate these issues with you.
Your mortgage deduction
This is one of the most beneficial and larger tax breaks available. There is space to write off interest for the price of a home costing as much as $500K or less. Individuals who file jointly will have interest written off from up to $1 million homes. This can be very beneficial, especially for new homeowners. Couples can also deduct interest from up to $100,000 on their home equity debt.
Property taxes can be about $2,000 a year for most Americans. Some states have higher taxes than others. The more property taxes you pay the more deductions you can claim. Just remember these deductions must be claimed within the same year you made those payments. Taxes for your property are paid quarterly, therefore, you may want to pay them before filing your taxes that way you can take a deduction for that payment.
When you pay mortgage points, your loan interest can be reduced. This is a fee you pay your lender when signing the mortgage. Mortgage points can be claimed as tax deductions. If you are planning on purchasing a home and your points meet current legal standards, you will deduct them right away or you can deduct them over time.
Private Mortgage Insurance (PMI)
Home owners that aren’t able to provide a 20% downpayment for their home may be stuck with a PMI, which can be about 0.5% or 1% of your home’s purchase price. Although this extra expense may feel a bit inconvenient at the time, it can be deducted, especially when homeowners have a low income. Couples who file jointly can deduct a Private Mortgage Insurance if their income is lower than $109,000. Those who file separately or independently can deduct the PMI if their salary is less than $54K.
The independent contractor homeowner
Freelancers and self-employed individuals can take advantage of the “home office deduction.” You will first have to calculate your yearly earnings and see how much is spent on your home office. In order to qualify for this deduction, the space used to work needs to be dedicated for this purpose. Although the IRS is not likely to inspect your office space, it’s the right things to do.
We know the tax tricks
At Zuckerman Law you are in good hands. We know the tax tricks that could save you thousands of dollars along the way. Everybody likes having that extra money on the table but only a few will do something to go get it. Contact our offices today and speak to one of our experienced Fort Lauderdale tax attorneys.