Home ownership improves life in many ways – and when tax day comes on April 15, homeowners could enjoy taking advantage of these significant tax deductions.
Private Mortgage Insurance (PMI) Deduction
Any homeowner putting less than 20 percent down on the purchase of a home is required to have Private Mortgage Insurance. In addition to writing off the interest you’ve paid on your home, you also get to write off the amount spent on PMI.
Homeowners who pay points fees when purchasing a home may fret when they have to hand over the cash at closing, but come tax time, they can turn that frown upside down. Points fees (each point is the equivalent of 1% of the purchase price of the home) are included in the income tax deductions list!
Interest on a Home Improvement Loan
If you’ve taken out a home improvement loan to add “capital improvements” to your home, you’ll get to enjoy more than a new and improved living space. You’ll also get to deduct the interest paid on the loan. Just make sure your home improvement loan qualifies, as loans taken out for repairs only are not eligible for the deduction.
Home Office Deduction
Work from home? Be sure to look into the deductions that may be available for using a portion of your home as an office. The IRS has specific requirements that must be met for the deduction, so read up on all the details here: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction.
Did your job require you to make a move to your current home? If the move was at least 50 miles from your old home and you worked full time for at least 39 weeks during the 12 months following your move, you may be eligible for a deduction on your moving costs. Deductions would apply to costs including transportation, lodging and storage fees.
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Note: This article provides general information on tax deductions that may apply to certain homeowners. Consult with your tax professional to determine if you are eligible for these and other deductions related to home ownership.