The new tax guidelines don't kick in till next year, so take advantage of the current deductions while you still can. We've compiled a list of the more common tax deductions homeowners can take to decrease their tax bill.
- Mortgage Interest. You can deduct from up to $1 Million in mortgage debt for joint filers and $500,000 for single filers. This does require that you itemize your deductions for for new homeowners, it's worth it since you pay so much in interest in the early years of a mortgage.
- Property Taxes. Your property taxes are fully tax-deductible. This changes next year when there will be a $10,000 cap on property, sales, and local income taxes.
- Energy Efficient Upgrades. If you added solar panels last year, you may be able to take a tax credit. There are caveats: they have to be installed on your primary residence and must generate at least half the electricity for your home.
- Private Mortgage Insurance. For home buyers who don't put at least 20% of the home price down, they will be charged private mortgage insurance (PMI). PMI is tax deductible for homeowners who make less than $109,000 annually.
- Home Equity Debt Interest. If you took out a home equity line of credit or a home equity loan, you can deduct the interest up to $100,000 for joint filers and $50,000 for single filers.
- Mortgage Points. If you bought a home in 2017 and paid points, you can deduct those, but they must be actual mortgage points and not origination points.
- Medical Home Improvements. If you added improvements to your home for medical necessity, you can deduct at least a portion of the cost as part of the medical expense deduction.
If you have questions about deductions available related to your home, please contact your tax adviser for more information.
For information about buying or selling your home, or the Reno-Sparks real estate market, please give us a call. We'd be happy to share what's going on in the local market and what you can expect as a buyer or seller.