As we enter tax season, it seems like a good time to talk about how owning a home can help lower your tax bill. First, lets clarify that you’ll need to do an itemized return to take advantage of the deductions. Second the deductions are just that deductions from the income that is subject to tax, not just looping that number off your tax bill.
So now that we’re clear 😊lets review. The biggest one, you may already be familiar with – the interest deduction. The money you pay in interest over the year on your loan is fully deductible on the first $750,000 of your loan or up to $1 million if your loan was originated before December 15, 2017.
The other biggie is deducting property taxes. You can deduct up to $10,000 in state and local taxes including property taxes.
Another deductible is if you paid points to lower your interest rate – this payment is tax deductible.
Finally another popular deduction is one many of came to know last year – the home office. However even though many of have one now – the deduction is meant only for the self employed – if you work full time for a company it may not qualify.
