Tax Breaks For Home Owners

Because the housing market has been so volatile, first time home buyers have been able to find amazing deals on their first home. Several have found fantastic deals and are already enjoying the perks of home ownership. Although you may already know that buying property is a fantastic investment, you may not know of the many tax incentives and benefits available to you as a home owner. Avoid many tax problems and determine which breaks and deductions are available to you. Here are some common tax deductions for home owners:

Interest on your mortgage payment. Interest on your home loan is tax-deductible. This is true for interest on up to a $1 million mortgage debt.

Improvements to your home. If you make improvements to your home that add to its value, they can typically be' deducted. This is not true of pure maintenance or repairs and is not applicable to cosmetic-only changes.

Taxes paid on real estate are tax deductible.

Home office space. If you work from your home, you can often deduct costs associated with that portion of your property. For example, you can deduct a certain portion of your utility payments and insurance.

Costs associated with moving. If you have to move more than 50 miles for a job, you can deduct any costs incurred during your transition. This includes storage expenses and transportation.

Upgrades to make your house more energy efficient. If you make any changes to your property to make it more energy efficient, you can cash in on several tax credits. Many of these credits have limits and require that you purchase only certified materials. Check with the manufacturer to see if your purchase is eligible.

Costs associated with selling. Once you decide to sell your house, costs incurred within 90 days of the sale can often be deducted. This can even include painting and carpet cleaning.

Understanding and educating yourself on the deductions available to you can reduce your liability with the Internal Revenue Service. If you're a first time buyer or new home owner and are interested in tax cuts associated with your investment, consult with a professional tax specialist. Understanding these deductions can help you file the appropriate documents with your taxes. Doing so will prevent tax problems and alerting the IRS to a mistake that can cause you to be audited.