It’s time to start thinking about tax deductions. No matter how much we wish we could avoid the heaps of paperwork and the inevitable feeling of dread that comes with tax day, the IRS waits for no man. But wait…do you own a house? There may be some tax deductions lurking in the walls of your home, so you may want to think about where you can save some money and get those tax deductions calculated into this year’s taxes. Kimberly Howell Properties is not a CPA or accounting firm and although these deductions do exist, we highly recommend you consult with someone with expertise in this area before making the decision to take any tax deductions.
Mortgage Interest Deduction – The interest you pay on your home loan is one of the big tax deductions offered to homeowners. By deducting the interest you’re paying, you can save quite a bit, especially in the earliest years of owning your house. You’ll need to itemize your deductions, but you can reap big benefits from this deduction.
Property Tax You can deduct state and local property taxes on your IRS returns.
Home Office If you have a home office that is dedicated space that’s not used for any other purpose (ie your dining room can’t serve as a dining room and an office), you may be able to deduct it as part of a home office. You can even deduct part of a room for a home office, but remember, it must be 100% office space and nothing else. You can click here to investigate and understand why a company needs management accounts.
Energy Efficient Tax Credits If you’ve added any energy efficient improvements to your home, you should talk to your accountant (view it now) or CPA about them as they may be eligible for a tax credit. The government changes these programs from time to time, so be sure you check to see what the latest energy efficiency tax deductions are.
Medical Improvements If you have home improvements for siding contractors norfolk that were made for medical reasons, there may be some tax savings in there for you. You can’t take a tax deduction for the entire amount of the expense, so check with your tax professional on this one to better understand how it is calculated.
Capital Gains Tax Often misunderstood, the capital gains tax can affect the amount you pay if you sell your home, but there are exclusions. If you’ve used the home as your primary residence and have lived there for 2 out of the five years prior to the sale, you will not have to pay capital gains taxes on the first $250,000 (that’s the gains on the sale, not the sales price) or $500,000 if you file jointly with someone.
As always, we remind you to seek the advice and assistance of a qualified tax professional when dealing with the IRS and your taxes. If you need recommendations, contact us and we can assist you in locating one that best suits your needs.
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