Tax Deductions Every First Time Fort Lauderdale Homeowner Should Know
Paying taxes is never fun. As the April 18 tax deadline approaches, it is important to maximize on your deductions to help reduce tax liability. One of the best sources to make reduce your tax bill is your home. Your home is the biggest investment you will ever make. Each year, more people throughout Fort Lauderdale are achieving their piece of the American Dream through home ownership. Although buying a house does not come cheap, your home comes with a variety of tax deductions and tax credits.
Most people in Broward County are completely unaware of tax breaks available to first time homeowners. What you do not know about tax law in Fort Lauderdale, can end up costing your thousands of dollars. First, it is important to understand how tax breaks work when it comes time to pay Uncle Sam in April.
Using Your Mortgage Interest as a Deduction
Unless you are ridiculously wealthy, chances are you applied for a mortgage loan to purchase your home. The good news is one of the biggest tax breaks available to homeowners is their home mortgage interest deduction. This tax break allows homeowners to deduct all interest paid on their mortgage loan for up to $1.1 million. If you are like most Fort Lauderdale homeowners, you are paying less than the limit. Using your mortgage interest as a deduction is particularly effective because the homeowner will end up paying more in interest than reducing their principal during the first few years of paying off their mortgage loan. The numbers don’t lie. According to the Congressional Research Service, the average Fort Lauderdale homeowner claiming the mortgage interest deduction saved nearly $1,900 in taxes. Each year, mortgage lenders will send out a form 1098. To take advantage of this tax break, simply list the amount of interest paid on the mortgage during last year. The homeowner will then use that number when itemizing taxes due in April.
Take Out a Home Equity Loan
Another effective tax break for first time homeowners is taking out a home equity loan. There are a variety of reasons why many people choose this option. By borrowing against the equity in their property, homeowners can pay for anything from paying for their child’s college education or making repairs or home improvements. Here’s how it works. If you owe $100,000 on your mortgage for a home worth $150,000, the homeowner has $50,000 of equity. By taking out a home equity loan of $30,000, the interest paid on the loan is tax deductible. However, it is important to understand the homeowner can only deduct up to $100,000 worth of home equity.
A Fort Lauderdale Tax Attorney Can Help
If you work from home, you can claim your home office as a deduction. There are many other options to help save on your tax bill. One of the best sources of information is to contact a legal professional with track record or providing clients with sound advice. Fort Lauderdale Tax attorneys Ira L. Zuckerman, bring more than 30 years of combined experience helping clients find the options. To learn more, contact their law office at Zuckerman Law, LLC and schedule a consultation today.