How to Take Advantage of Tax Breaks as a Homeowner

If you’ve owned a home before, you know very well that there is a lot more in the way of expenses to pay as a homeowner beyond the mortgage and utilities. The cost of basic home maintenance can be a lot. Goodness knows that taxes can be expensive too. The good news is that there are tax breaks that you can take advantage of as a homeowner.

Deduct Mortgage Interest

Few people pay for homes in cash outright. That’s pretty outside the budget for most homeowners. Taking out a mortgage loan is the most common solution. The thing with mortgage loans is that they accrue interest over time, just like any other loan. Interest adds up, and can add tens of thousands, even hundreds of thousands to what you end up being responsible to pay by the end of the loan. Fortunately, you can deduct your mortgage interest from your taxable income if you itemize your tax deductions.

Home Improvements

Making improvements on your home is a pretty normal part of being a homeowner. They can also be pretty expensive. Depending on the home improvements you choose to make, you may be able to take advantage of some tax credits. According to Suntuity Solar, installing solar panels can qualify you for a 26% tax credit. If that’s an improvement that you’re sitting on the fence about, you might want to get moving on it. Those tax credits aren’t going to be around forever.

Home Office

The pandemic prompted a huge portion of the workforce to start working from home. That prompted many people to create home offices. If you’re one of the people with a home office, it could get you another tax break. As TaxSlayer points out, the expenses that you accrue for your home office can be deducted from your taxable income. You’ll just need to be using your home office exclusively for business on a regular basis in order to qualify. If your home office qualifies you for a tax deduction, the size of the deduction will be based on the percentage of your home it takes up.

It’s always nice to find ways to spend less and save more, especially when it comes to things like taxes. Fortunately, there are multiple tax breaks you can take advantage of as a homeowner, and this is far from an exhaustive list. Remember, if you have any questions about what tax breaks apply to you, you can always consult with a tax professional.

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