If there is one thing that we want to eliminate from this world, it is taxes. It seems like we have to pay taxes on whatever we do nowadays. At this rate, the day is not far when we’ll have pay for tax for breathing as well, isn’t it? What if we tell you that there is a way through which you can claim tax breaks?

Unlike big corporations, salaried individuals get little-to-no tax deductions. However, the US tax laws do have concessions for individuals, especially homeowners. If you are a homeowner, then this article is just for your. In this article, we’ll take a look at the different tax breaks that you can enjoy. Let’s learn about a few tax breaks for homeowners.

Tax Breaks for Homeowners

 

Mortgage Interest

One of the biggest advantages of being a homeowner is that you can deduct your mortgage interest from your taxes. If you’re filing your tax returns, calculate the amount of interest you’ve paid in the current tax year. However, there are a few restrictions on this deduction. The interest paid is deductible on taxes if your mortgage is $750,000 – for any loans issued after Dec 14, 2017 – or $1 million for loans issues prior to Dec 14, 2017.

 

Rental Income

Homeowners are using the unused space in their houses as an opportunity to earn some extra cash. This venture is also viable for claiming tax breaks. However, it is not the rental income that provides any deductions. The amount paid for home improvements to turn your dwelling into rental space is treated as tax deduction. So, if you have spent, say $10,000, for this purpose, you can claim the amount as a deduction on your tax return.

 

Home Office Expenses

Working from home is becoming common these days. However, this also mean that you have to spend long hours in your house, consuming your electricity and other utilities. Self-employed workers who work exclusively from home are now allowed home office deductions.

 

Capital Gains from a House Sale

The profit made on the sale of a house is often treated under the head of capital gains. Usually, this head has a flat rate on all types of gains incurred during a year. However, when it comes to a house sale, there are some favorable concessions. Homeowners who have lived in their property for at least two years during the five-year period right before the date of sale can waive off $250,000 from their profits and get it treated as a tax-free amount. Similarly, a married couple – or joint filers – can make $500,000 as tax-free profit.

The Final Word

Who would know that owning a house could be so beneficial? We bet that these tax deductions would make you consider getting a house of your own.