- 1. Mortgage Payments The biggie: You can deduct the amount of interest paid on your mortgage.
If you purchased your home last year, you should be receiving a document called Form 1098
from your lender that includes the amount of interest paid, as well as the points you paid,
so that you can maximize your deductions for a bigger refund.
- 2. Accidental Loss Here’s hoping you don’t actually claim this one, which has to be the result
of a sudden, unexpected or unusual event (like property damage as a result of last year’s
horrible hurricane season, for example). If your losses total more than 10 percent of your
income, you can deduct whatever your insurance doesn’t cover.
- 3. Solar Energy If you’ve made any solar improvements lately (energy panels),
you’re eligible for a credit of 30 percent of the total cost, including installation,
with no set limit. Note that the residential energy efficient property credit will drop
over the years under the new tax code, so don’t wait too long if you’re noodling on the prospect.
(The credit decreases to 26 percent for tax year 2020; 22 percent for tax year 2021, then expires December 31, 2021.)
- 4. Historical Preservation Buy an old fixer-upper? You might be eligible for a deduction.
While the historical preservation credit mostly applies exclusively to “income producing”
properties (like commercial buildings), certain states have historic preservation tax credits
for owner-occupied homes. In order to qualify for them, your house has to be listed on the
National Register of Historic Places, and any work done must be reviewed to ensure it meets preservation requirements.
- 5. Rental Expenses on a Secondary Home Unlike your primary residence (which does not count a rental
as taxable income), if you rent out your second home for more than two weeks a year,
you have to report it on your return. However, you can get tax breaks in the form of maintenance
costs related to rental expenses: meaning stuff like supplies, repairs and furniture.
- 6. Capital Gains Exclusion The majority of taxpayers don’t need to pay taxes on their home’s sale profit,
thanks to this guy. The gist: If you owned and lived in your main home for two out of five years before
its sale, you can make up to $250,000 profit when selling and not have to claim it on your taxes.
As a married couple, you may be able to exclude up to $500,000 profit. On the other hand, if you pocketed
more than $250,000 (on your own) or $500,000 (as a couple), you will be taxed.
- 7. Home Office If you legitimately use your home office full-time (“regularly and exclusively,”
per the IRS’s guidelines), you can take the home office deduction for a percentage of your mortgage interest,
insurance and maintenance—which is based on the percentage of your square footage used for your business.
- 8. Property Taxes Reminder: If you itemize your deductions, you can write off the full amount of your home’s
property taxes. But heads up: Starting next year this deduction will be limited to $10,000 total (per the new tax code).
- 9. Moving Costs Did you buy your new home because of a job? If you meet the criteria (aka you work full-time
for at least 39 weeks within the first 12 months after your move, and your new gig is at least 50 miles
farther away from your old home than your old place of employment), you can claim your moving
costs—everything from movers to storage boxes.