It's the height of tax season, and we're all hoping for a little something extra in our return this year. But did you know as a homeowner (and in some cases even as a renter!) there are several expenses that you can deduct related to our houses? We got the scoop from Sarah Minton, Certified Public Accountant in San Diego, CA as well as a financial planner in Memphis, TN and learned about the following eight home tax deductions that may be available to you. Read through, and make sure to consult your professional tax planner to determine what will work for your specific circumstances.
1. According to the IRS, home improvements are jobs like plumbing, wiring, installing air conditioning or putting on a new roof, that add value and prolong our house's life. You can't necessarily deduct these costs, but you can add the price of materials and labor to the basis of your home. In certain circumstances, this will reduce the tax owed on the sale of your home in the future, if you decide to sell it. Head to the IRS webpage for homeowners to find out more information.
2. There are some home products, particularly appliances that are Energy Star rated, that may qualify for a deduction. You can get the full list here.
3. You CAN deduct real estate taxes, interest that qualifies as home mortgage interest, and mortgage insurance premiums. Visit the IRS site for the specifics.
4. If you own a condo or co-op, you can enjoy tax deductions similar to those of detached homes. This is great to know if you're looking into homeownership for 2013, but hate to mow the yard or drag the garbage to the curb.
5. If you're a renter, you won't be able to deduct these costs from federal taxes, but in certain states including Maryland, Minnesota and California, you may be able to receive a credit on your state tax return. Each state has different rules, so check with your tax planner for details.
6. If you move more than 50 miles to a new full-time job in the same line of work, some of those moving expenses are deductible. For more information, see the IRS publication on moving expenses. These breaks may be available to both homeowners and renters.
7. If you work out of your home or apartment you may be able to deduct a portion of the mortgage or rent for this use, if you meet specific requirements. This could be a tricky one though, so as with all tax tips, always seek professional advice to make sure you qualify. Read here for the specifics.
8. You can deduct contributions made to a qualified organization, assuming you are filing using Form 1040. Clothing and household items must be in good used condition or better, and you can deduct the fair market value at the time of donation. Any item that has a value of more than $500 must include a qualified appraisal with your return.
Of course, this information is not intended to substitute for obtaining advice from a professional tax planner, and the outcomes may differ based on the facts and circumstances of your unique situation. Also keep in mind that many of these deductions only apply to a primary residence, and some deductions may phase out as your adjusted gross income increases.
And click through the slideshow of seven efficient upgrades (that all cost less than $50!) that will save you money at home:
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