5 Tax Benefits of Owning a Home

5 Tax Benefits of Owning a Home

Here are some tax breaks homeowners should be aware of when they file their 2021 taxes. Thanks to this Realtor.com video for these very informative and money-saving tips!

1. Mortgage Interest. Homeowners with a mortgage that went into effect BEFORE December 15, 2017, can deduct interest on loans up to $1 million. For mortgages that went into effect AFTER December 15, 2017, homeowners can deduct only the interest on the first $750,000.

2. Property Taxes. This deduction is capped at $10,000 for those married filing JOINTLY no matter how high the taxes are. Check your standard deductions.

3. Private Mortgage Insurance (PMI). You can deduct the interest on your PMI thanks to the Mortgage Insurance Tax Deduction Act of 2021.

4. Energy Efficiency Upgrades. There are two tax incentives, solar electric and solar water-heating equipment, you can take advantage of until December 31, 2023.

5. A Home Office. For self-employed people whose home office is the principal place where they work – you can deduct $5 per square foot, up to 300 square feet, of office space, which amounts to a maximum deduction of $1,500. Unfortunately, if you are a W-2 employee, you’re not eligible for the home deduction, even if you worked from home during Covid-19.

 These are just a few tips for filing this 2021 tax season. Contact your CPA for all your tax filing needs.