If you are a homeowner, you know the importance of saving money. However, what you may not know is that, as a homeowner, there is a vast array of things that you can claim as write-offs on your taxes. Here are just a few money-saving tips you can use during tax time.
First-Time Homebuyer’s Credit
If you bought your home between January and April of the year you are filing taxes, you may be eligible for a credit. While this credit is referred to as a first-time homebuyer credit, as long as you purchased your home in the required time frame, you may qualify.
However, to qualify for a larger credit, you must not have owned a home during the three years prior to purchasing your new home. To qualify for a smaller credit, you must have owned a previous home for at least five of the eight years prior to purchasing your new home. No credit is given for homes valued at more than $800,000.
Home Energy Credits
You may also qualify for a tax credit if you installed energy-saving features in your home such as energy-efficient windows, doors, heat pumps, furnaces, air conditioners or water heaters. This credit is 30 percent of the cost of installation, with a top credit of $1,500.
You may also be eligible for a tax credit if you have installed various alternative energy features in your home. These include, but are not limited to, solar panels, geothermal heat pumps, solar-powered water heaters and residential wind energy systems. In these cases, your credit is 30 percent of the full cost of the system, with no limits.
Tax Credit for Moving Expenses
If you had to move more than 50 miles from your old home for a new or existing job, you can deduct your travel and lodging expenses for you and your family. You can also deduct the cost of moving your furniture and other household property. This deduction is allowed even if you do not itemize your deductions.
Deductions for Property Taxes
If you paid any local or state property taxes during the year, you may be eligible for a deduction. This deduction helps increase your standard deduction on your tax return. If you qualify, you may be able to add $500 to your standard deduction if you are single and $1,000 if you are married and filing jointly.
If you own any rental homes, you can deduct any property taxes you paid for them on IRS form Schedule E. Finally, if you bought your home during the year that you are filing your taxes, and the seller had paid a portion of its property taxes for that year, you can include that amount in your property tax deduction as well.
Deductions for Home Damage
If your home was damaged due to such things as a fire, storm or burglary, you may be eligible to claim a deduction on your tax return. To calculate your deduction, subtract $100 for each casualty or theft event and then subtract 10 percent of your adjusted gross income.
These are just a few of the great money saving tips for homeowners at tax time. Other deductions you may be eligible for include residential boats, RVs, vacation homes and rentals, depreciation of your home, home-equity debt, home offices, home sales, mortgage interest, clergy allowances and IRA payments.
Homeowners can potentially save hundreds of dollars during tax time. To take advantage of the credits and deductions that you qualify for, seek help from a tax professional today.