There are more benefits to owning a home than just being able to call a place yours. Being a homeowner comes with many perks, like tax write offs!
Read over the list below to see if there are write-off’s that could apply to your situation. I haven’t listed them all here, so be sure to get the advice of your tax-advisor. This is not tax advise, just a quick reminder of things to talk with your tax-advisor about.
1. Mortgage Interest
You can lower your taxable income by deducting mortgage interest
2. Home Equity Loan Interest
A home equity loan is when you refinance and have access to the equity you’ve built in your home as collateral to borrow funds that you need for other purposes. You can deduct the interest you pay on this loan as well.
3. Discount Points
When you take out a mortgage, you have the option to purchase discount points to lower your interest rate. If you do this, you can deduct the cost of the discount points.
4. Property Tax
As a homeowner in Utah, you have property taxes at the state and local level. They are paid for through your escrow account, but don’t forget about them! You can deduct up to $10,000 of property taxes as a married couple filing jointly, or $5,000 is you are single or filing separately.
5. Necessary Home Improvements
This can be a tough one! The definition of “necessary” can be very limited. Remodeling your kitchen may not count, buy if you have to make your home more accessible for medical reasons, that should qualify!
6. Home Office Expenses
Post-Covid, a lot of us have moved to working from home. If this is you, you may be able to deduct some of the expenses of maintaining that space! The requirements are that you use that space for regular and exclusive business use.
7. Mortgage Insurance
Depending on how your loan is set up, you may be paying Private Mortgage Insurance with your mortgage. This is there to protect your lender in the case of a default. You can deduct this expense.
What does this mean for you?
Owning a home comes with so many financial perks, tax deductions being just one of them. Be sure to ask your accountant about these expenses, and make sure you don’t miss out on any of the deductions that you deserve. The only questions now is, what are you going to do with that big refund check?
