Tax refundsPhoto byUSA Diario
An average annual expenditure of $12 904.00 USD is spent by American homeowners on home improvement, maintenance and emergency actions related to their residences. All this without including mortgage payments or property taxes. This was reported by the home services website “Angi”.
For this and many other reasons, owning a home in the United States is becoming more and more expensive. However, these expenses also have a silver lining in the form of tax credits and deductions for homes. For homeowners, this means a larger tax refund.
Clearly, it is very important for homeowners to learn and know as much as they can about their potential tax benefits. This way, they can maximize their tax refund when they file their income tax return.
Many deductions and tax credits related to homeownership are less obvious. Although most homeowners with mortgages know that they can deduct interest payments on their loans.
What are tax breaks for homeowners?
Most tax breaks for homeowners are tax deductions, which represent reductions in your taxable income. Therefore, the smaller the portion of their income that is taxed, the less money homeowners pay in taxes.
That is why when they file their income tax returns, they will have to decide whether to take the standard deduction. It will be a total of $12,950.00 USD for single filers and $25,900.00 USD for joint filers.
For heads of household or married filing separately the amount will be $19,400.00 USD. Deductions such as donations to charitable organizations and state taxes can also be itemized.
In taking advantage of the tax deductions for homeowners, deductions will be itemized through the 1040 form, Schedule A. On the other hand, tax credits for such homeowners do not require them to itemize.
Mortgage interest is one of the most common and lucrative tax deductions. For this reason, payments are often allocated more to loan interest during the early years of the mortgage.
Joint tax filers can deduct all mortgage interest payments on loans up to $1 million. Also, with loans up to $750 000.00 USD if made after December 15, 2017.
Although, single filers get half of those amounts. Meaning, in order to deduct their mortgage interest they will have to fill out Internal Revenue Service
