Attention Homeowners: 2022 Tax Credits You NEED To Know
(DailyDig.com) – One secret to lowering costs during homeownership involves tax credits — but they can be a bit tricky, as they change from year to year, and some require you to itemize various expenses throughout the year. Each year, it’s important to check up on the latest tax credits for homeowners, and 2022 is no different. As you build equity in your asset, don’t forget to take advantage of every tax break so you can save money along the way. Here’s what you need to know as a homeowner when it comes to file 2022 taxes.
Consider Mortgage Interest Deduction
If you have a mortgage, you pay towards your loan’s principal and towards the interest, which is the fee you pay your lender for the privilege of borrowing the money required. However, many homeowners are unaware of the fact that they can deduct the interest on their taxes. If your mortgage agreement was signed on or after December 16, 2017, you’re in luck, as you can likely deduct interest (depending on the total amount borrowed).
Make sure you keep your mortgage date handy, as you’ll need to know that when you submit your taxes online or via your accountant. This will determine your eligibility.
Deduct Property Taxes
There’s nothing worse than being taxed on property you’re still paying off, or property that you already own. Unfortunately, this is the case with property — you get taxed on it. However, most people can deduct $10,000 or less in property taxes per year. However, that depends upon state and local guidelines, so make sure you check with your accountant prior to filing.
Don’t Forget About Discount Points
Did you pay discount points to get a lower interest rate on the loan for your home? If so, you could deduct those when it’s time to file your tax return. See your accountant for more information.
Remember the Home Office Deduction
Are you self-employed? If so, you can get a major deduction for maintaining your home office if you are a homeowner. There are two ways to perform this deduction: based on the percentage of your home, or to use a simplified deduction. This doesn’t apply to salaried employees, but if you’re self-employed or freelancing as your full-time income or even in addition to it, you should consider a home office deduction.
Deduct Your HELOC and Home Equity Loan Interest
Home equity lines of credit (HELOCs) as well as home equity loans permit you to borrow against the value of your home. But, if you used the HELOC or home equity loan for the purposes of home improvement, such as the installment of a new roof, you can deduct the interest you’ve paid on that loan. Make sure you save all relevant paperwork so you can provide it to your tax professional.
Standard or Itemized Home-Related Tax Deductions?
Another important thing to know about tax deductions in general: many times, you will have the option of doing a standard deduction or an itemized one. An itemized deduction considers the amount of money you spent to the exact amount (receipts required). Standard deductions are things most people spend money on as it relates to their home, and if applicable, you can save yourself the bother of itemizing, and take that standard amount. Unless your expenses are significant, it’s likely that a standard deduction will be of the most benefit. However, always have your house-related paperwork ready for your accountant’s review.
May you and your accountant have the best tax refund yet as a homeowner filing your 2022 taxes!
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