A New Year means tax season is right around the corner. One of the many perks of homeownership is big homeowner tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those breaks!
Mortgage Interest Deduction: Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away! (If you are new to homeownership, the first 10 years of mortgage payments are primarily paid toward the interest portion of your total payment which makes this a huge deduction for you in the early years of your mortgage. )
Home Office: There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.