In this day and age, any tax write off
is a good write off! Seriously, you just have to know
what part of your house you can use as a deduction if
you are looking for a write off.
If you are currently renting, a house is absolutely
a better tax deduction. In most cases, the interest
you pay on a home loan is a tax deduction possibility.
Rent for a personal residence is not a tax deduction.
If you make improvements to your home, you may be able
to deduct those repairs – or at least a percentage
of them. As you begin a home improvement project, it’s
vital to keep all your receipts. Keep them organized
in a handy place so you’ll know exactly where
they are as tax season approaches.
If you operate a business from your home or use your
house for home office space, that will give you another
tax deduction. Be careful. Your entire house payment,
utility costs and other expenses will not be one hundred
percent deductible. Instead, the Internal Revenue Service
offers a deduction based on a percentage. The formula
allows a deduction for the exact square footage of your
house that is used specifically for business purposes.
For more information about home business deductions,
visit the IRS website at www.irs.gov.
Don’t expect to receive a huge tax deduction
simply because you buy a house. If you buy a house mid-year
after renting the first half of the year, you might
not see an immediate worthwhile deduction. After all,
the deduction is based on the interest paid during that
year. The following year, however, when your deduction
is based on an entire year’s worth of interest,
your deduction will be more. Hang in there an know that
home ownership has many benefits, including building
equity in real estate property and in getting a tax
deduction that you just don’t get when renting.
Speaking of equity, if you’ve bought a home and
have some high interest credit cards hanging out there,
you might consider a home equity loan. By refinancing
your house – and getting enough cash back to pay
off those credit cards – you can use your interest
on your refinance as a tax deduction. So, in a way,
it’s like paying off those creditors AND getting
to deduct the interest from your taxes. As an added
bonus, your house payment just might be lower, too.
If you’re interested in learning more about how
the best use your home for a tax write off, contact
our refinance specialists today. Our specialists can
answer your questions regarding deductions generally
allowed to home owners and can help you determine if
refinancing will be a good choice for you. |
