Tax time is looming. If you are a homeowner, you may be eligible to boost your return with deductions you may not be aware of. Here are a few good tax tips to take advantage of for home owners new and old:
1. Property taxes are deductible. (For new home owners, don’t forget the taxes you may have reimbursed the seller for. These will be listed on your settlement sheet from your closing.)
2. Interest on your mortgage payment for your primary and secondary homes is deductible (up to a certain amount).
3. You can deduct the points you paid on the home (or the seller paid for you) in the tax year you bought the home.
4. Money spent on improvements or renovations you made to your home for medical reasons may be deductible as well as improvements that make your home more energy efficient.
5. If you are self-employed or work from a home office on a regular basis your home office expenses may be deductible plus a certain percentage of your home’s utility and insurance bills. (You are probably not eligible for this deduction if you are only taking work home every once in a while and using your home office sporadically.)
6. If you put down less than 20% when you bought your home, you’re probably paying for PMI (Private Mortgage Insurance). You may be able to get some of this money back if you itemize your taxes and claim the PMI deduction.
There are certain guidelines and qualifications to meet in order to receive some of the above tax credits so always consult a tax advisor to meet requirements and maximize your return. There may be some deductions you weren’t aware of. Too bad we can’t deduct our heating bills for these frigid Michigan winters. We would all have a nice tax return to look forward to!