CREDIT & DEDUCTIONS
CREDIT & DEDUCTIONS
There are a variety of income tax credits and deductions available for homeowners. This section explains what expenses you are eligible to deduct as a homeowner.
- Home Mortgage Interest – allows taxpayers who own their homes to reduce their taxable income, up to $1,000,000, by the amount of interest paid on the loan which is secured by their main residence. Learn more!
- Points on Home Mortgage and Refinancing – Points is a term used to describe certain charges paid to obtain a home mortgage. The IRS considers these points to be prepaid interest, and therefore are fully deductible. Learn more!
- Interest on Home-Improvement Loan – it’s possible to receive a tax benefit for making substantial improvements to the quality of your home. Home improvement tax deductions do not include the actual cost of the improvement, just the interest on your qualifying loan. Learn more!
- Property Tax- Property taxes, for your main home or other non-rental/non-business property, are fully deductible from your income taxes on your Form 1040. Learn more!
- Energy-Efficiency Tax Credit – You may be able to reduce your taxes if you made certain energy-efficient improvements to your home. For information on energy-efficient products, visit the U.S. Department of Energy’s EnergyStar website, but note that not all Energy Star products qualify for the tax incentive. Learn more!
- Home Office Deduction – If you use part of your home to run a business, then you may be able to deduct certain expenses for the business use of your home. The home office deduction is available for both homeowners and renters, and it also applies to all types of homes. Learn more!
- Capital Gains Exclusion – If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse. Learn more!
- Mortgage Credit Certificate – is a certificate issued by certain state or local governments that allows a taxpayer to claim a tax credit for some portion of the mortgage interest paid during a given tax year. Learn more!
- Moving Expense Deduction – If you have to sell your house because you’re relocating for work, and your new job is at least more than 50 miles farther than your old home was from your previous job, then you might be able to deduct some of your moving expenses. Learn more!
- Selling Costs – After you have decided to sell your home, you can deduct some of the fees you incur to unload your home. Some of these costs include repairs, real estate agent’s commission, inspection fees, title insurance, advertising expenses, and more. Learn more!