This year’s tax filing deadline might have been extended (pushed back until July 15), but that doesn’t mean your annual taxes should fall off on your radar.
In fact, with the trying times we’ve found ourselves in, a proactive tax strategy is critical. For many, it can save you much-needed cash, increase your refund, and help alleviate some financial stress.
If you’re a homeowner, thinking ahead about your taxes is even more important, as there are a large number of deductions and write-offs you could be eligible for.
Do you own a home? Want to minimize your tax liabilities and put some much-needed cash back in those family coffers? Here are five write-offs you’ll want in your sights:
If you have a mortgage, then you can deduct any interest you paid on the loan across the year from your taxable income. Have a home equity loan? You can deduct interest paid on that mortgage, too — as long as you used the funds to pay for home improvements. Altogether, you can only deduct interest on up to $750,000 of mortgage debt.
Your property tax costs are another big deduction you can take as a homeowner. The max you can write-off is $10,000 — and that includes any state and local taxes, too (sales tax, income tax, etc.) This is a new limit imposed under the Tax Cuts and Jobs Act of 2017.
Did you just buy your home in 2019? If you paid any discount points to lower your interest rate, then the costs of those can be deducted as well. Check your closing documents if you’re not sure what you paid for these.
Home office costs
If you’re a self-employed professional and you work out of the home (even just some of the time), then you can likely write off some of your home office expenses, too. You can even deduct portions of your home’s mortgage, electric bill, WiFi costs, and more.
Mortgage insurance premiums
In the event you’re paying for mortgage insurance, these premiums can also be deducted. This rings true whether you have an FHA loan, a conventional loan, or even a USDA loan. Don’t forget any upfront mortgage premiums you paid at the closing table, either (as long as you closed in 2019).
Maximize Your Deductions as a Homeowner
Keep in mind that you will need to itemize your returns if you want to take most of these deductions. In some cases, simply taking the standard deduction may end up more economical than itemizing. It’s best to evaluate both options with a certified tax expert to make sure you’re making the best move for your finances.
Want more advice on how to make the most of homeownership? Get in touch with Premier Nationwide Lending today.
Premier Nationwide Lending is an Equal Housing Opportunity lender. Sponsored by NTFN, Inc. 6201 West Plano Parkway, Suite 100, Plano, TX 75093 | NTFN NMLS 75333.