What Are the Tax Benefits of Owning a Home?

What Are the Tax Benefits of Owning a Home?

Published On: November 1, 2021|Categories: Blog, Home Owners|Tags: , , |

What Are the Tax Benefits of Owning a Home?

There are many tax benefits to owning a home. In fact, there are so many that it can be difficult to keep track of them all. This guide explains four of the most important tax benefits of owning a home. Remember, though, you should absolutely consult with a tax professional; this isn’t tax advice, but a guide to the benefits that may be available to you.

What Are the Tax Benefits of Owning a Home?

The four biggest tax benefits of owning a home include:

  1. You can deduct mortgage interest
  2. You can deduct property taxes
  3. If you work from home, you can deduct your home office
  4. You get tax credits for making energy efficient upgrades

Here’s a closer look at each.

Tax Benefit #1 of Owning a Home: You Can Deduct Mortgage Interest

One of the biggest tax benefits of owning a home is the ability to deduct your mortgage interest. This deduction can save you a significant amount of money, particularly if you’re in a high tax bracket.

To deduct your mortgage interest, you’ll need to itemize your deductions on your tax return. This means that you’ll need to total up all of your eligible expenses and claim them on your return.

If you’re not sure whether you should itemize or take the standard deduction, it’s generally a good idea to do some calculations to see which option will save you more money.

Tax Benefit #2 of Owning a Home: You Can Deduct Property Taxes

Another big tax benefit of owning a home is that you can deduct your property taxes. This deduction can also save you a significant amount of money, particularly if you live in an area with high property taxes.

To deduct your property taxes, you’ll need to itemize your deductions on your tax return. This means that you’ll need to total up all of your eligible expenses and claim them on your return.

If you’re not sure whether you should itemize or take the standard deduction, it’s generally a good idea to do some calculations to see which option will save you more money.

Tax Benefit #3 of Owning a Home: You Can Deduct Your Home Office

If you work from home, you can deduct your home office on your taxes. This deduction can be extremely valuable, as it can help offset the cost of maintaining your home office.

To deduct your home office, you’ll need to itemize your deductions on your tax return. This means that you’ll need to total up all of your eligible expenses and claim them on your return.

If you’re not sure whether you should itemize or take the standard deduction, it’s generally a good idea to do some calculations to see which option will save you more money.

Tax Benefit #4 of Owning a Home: You Get Tax Credits for Making Energy Efficient Upgrades

If you make energy efficient upgrades to your home, you may be eligible for tax credits. These credits can offset the cost of the upgrades and save you money on your taxes.

To claim these credits, you’ll need to file Form 5695 with your tax return. This form will detail the eligible upgrades and the amount of the credit that you can claim.

Keep in mind that not all energy efficient upgrades are eligible for tax credits. Be sure to check with the IRS before claiming any credits.

Owning a home comes with many tax benefits. Be sure to take advantage of all the deductions and credits that you’re eligible for. By doing so, you can save yourself a significant amount of money on your taxes.

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