Your house could be a source of hidden tax deductions.
You probably know about the mortgage interest deduction (MID), but most people don’t know about these three real-estate related tax deductions that tend to come and go in IRS regulations. Recently, Congress retroactively revived many tax deductions for home- and property owners, and many states are also attempting to save homeowners a little bit of money this year just in time for tax season. Check out these three often-missed, real-estate related tax deductions and make sure you are keeping every penny that is yours this tax season!
1. Refinancing Points
When you refinance a loan for the first time, you get to deduct your refinancing points on that loan. However, this is a longer process than you might think because these points must be spread out over the life of the loan rather than deducted all at once. For this reason, many homeowners and accountants miss this deduction all together. There are many rules governing how many points you can deduct and when you can deduct them, so bring this up with your tax professional to see if you might be eligible for this deduction.
2. Moving Expenses
If you had to move in order to take a new job, then your moving expenses could be tax deductible. Your new job must be at least 50 miles from your old home in order to qualify, but if it is you could deduct moving expenses for getting yourself and household items to your new location and, if you drive your own car to get there, you might get a deduction for mileage and tolls as well.
3. State Sales Taxes Paid on Home Improvements
Depending on what type of home improvements you made to your home this year, you might be able to deduct the amount of state sales taxes you paid on those improvements. The IRS has a very specific list of qualified improvements for this deduction, so check with your tax professional before you start whittling away at your tax totals using this method.
Do you take real-estate related deductions on your taxes? Why or why not?