One of the benefits of owning a home is the many tax breaks you’re allowed by Uncle Sam each year. If you’re a homeowner, it only makes sense to take advantage of as many tax benefits as you can, right? You’re probably already aware of the substantial savings you receive from mortgage-interest and property-tax deductions, but there are other, less-common tax breaks that can really add up, including:
- Home Improvement Loan Interest – The IRS allows you to deduct interest paid on up to $100,000 in debt on home improvement loans and home equity lines of credit, as long as the loan isn’t greater than the value of your property.
- Renewable Energy Credits – If you installed energy-saving solar panels or a solar water heater in 2016, you could be eligible for a tax credit on your 2016 tax return. The Renewable Energy Efficiency Property Credit covers up to 30 percent of the cost of the equipment and installation.
- Home Office – Any dedicated space in your home that’s used exclusively as your primary place of business may qualify for a tax deduction. The catch? You must either operate your own business or work from home out of necessity, at the convenience of your employer. In other words, if your employer has an office across town and you’re working from home because it’s simply more convenient for you, you don’t qualify.
- Discount Points – If you paid points to get a better interest rate on your home loan, you may be able to claim a deduction for those points in the year you paid the points.
- Super Short-Term Rentals – Want to make extra cash renting your home (or a room in your home) for a sports or cultural event? Maybe the Super Bowl, World Series or some other major event is happening in your town? The income you make from a rental that lasts 14 days or fewer during the course of one year is completely tax free.
Be sure to consult your tax advisor about tax breaks that are available in your particular circumstances. This financial institution does not give tax advice. Consult your tax advisor for information specific to your situation.