After investing all that time and money into your home, it feels good to reap the benefits come tax season. Many home-related expenses can be deducted from your taxes to save you thousands of dollars.
Sure, moving from a simple IRS 1040EZ form to a 1040 long form and Schedule A is more time consuming, but it pays off in how much money it saves you each year. The Schedule A form is where you list your homeowner expenses that reduce your tax burden.
Here are some of the best tax breaks associated with home ownership:
- Mortgage interest: The interest paid on your mortgage each year is tax deductible. During the beginning years of home ownership, interest makes up the majority of your payments. This means you will have far less to pay when tax season arrives.
- Vacation homes: In addition to your primary residence, you can deduct interest paid on a vacation home loan. You can even rent it out for short periods of time while still qualifying for this benefit.
- Tax-free profits: If you sell your home after living in it for more than two years, any profit from the transaction is tax-free. This is a great incentive as real estate is known for its appreciation.
For more homeowner tax perks, please check out the Coldwell Banker Agent Information site. Leave a comment below to let me know which benefit is the most appealing!
Still have questions about Denver homeowner tax benefits? Give me a call at 888-860-1931, and I will answer all of your questions and concerns.
Photo Credit: Ehow