Homeowners: Don’t Miss Out on Tax Breaks
You already enjoy homeownership benefits like mortgage interest and property tax deductions. But there are lesser known tax breaks that also can add up.
See if you qualify for these five.
- Home improvement loan interest. You may be able to deduct interest paid on up to $100,000 of debt on home improvement loans and home equity lines of credit, as long as the loan doesn’t exceed the value of your property.
- Renewable energy credits. If you’re considering installing solar panels or a solar water heater, you could be eligible for a 30 percent tax credit if you put such systems in service by December
- Home office. A room in your home that is used exclusively as your primary business space may be eligible for a tax deduction. To qualify, you must either operate your own business or work from home out of necessity or at the convenience of your employer. Know that if you’re just working from home because it’s easier than heading to an office downtown, you wouldn’t qualify.
- Discount points. If you paid points to lower your interest rate on your home loan, you may be able to claim a deduction for those points for the year that you paid them.
- Super short-term rentals. If you make money renting your home or a room in your home for 14 days or fewer in a year, that income is tax free. So if the Cubs make it to the World Series again this year, you could rent out your condo to out-of-town fans and pocket a little cash.
Do a year-end check to be sure you’ve taken the necessary steps to qualify for all the tax breaks that you’re eligible for.
Liberty Bank for Savings does not give tax advice. Consult your tax advisor for the tax breaks that are specific to your situation.