Though it may not have been your sole purpose of buying a home — tax breaks are a huge perk of homeownership. According to U.S. News, as many as 19 million taxpayers will benefit from itemized deductions this year. We spoke with Robert Covelle Sr of COVELLE & COVELLE Public Accountants, a firm who specializes in taxes and is certified by the IRS, about how homeowners can benefit this tax season.
Here are 5 tax breaks you should take advantage of:
1. Mortgage Interest
Something every homeowner can count on this tax season: deducting mortgage interest. In other words, you are able to deduct any interest you paid on your residence — up to $1 million in loans. This also includes deducting interest on a refinanced mortgage (with certain debt limitations).
2. State and Local Taxes
Don’t fret — those thousands of dollars you paid for state and local property taxes are actually deductible. As a matter of fact, you can deduct a maximum of $10,000 of your paid total property tax, state income tax, or state/local sales taxes.
Pre-Mortgage Insurance with properties that have less than 20% down is deductible.
Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture. If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.
Taxpayers who upgrade their homes to make use of renewable energy may be eligible for a tax credit to offset some of the costs. As of the 2018 tax year, the federal government offers the Nonbusiness Energy Property Credit. The credits are good through 2019 and then are reduced each year through the end of 2021. Claim the credits by filing Form 5695 with your tax return.
For more information on how you can benefit this tax season, please contact Robert Covelle Sr at 781-844-2935or [email protected].
COVELLE & COVELLE Public Accountants is a firm who specializes in taxes and is certified and approved by the IRS. With over 40 years of experience, COVELLE & COVELLE has prepared more than 10,000 tax returns and has a proven track record. They are dedicated to providing clients with professional and personalized services in a wide range of financial, accounting and tax needs.