By Edward Baswell, Home Authority Real Estate

As a homeowner, you benefit from tax breaks that can make your home more affordable, with thousands of dollars shaved off from your IRS bill each year. With a little less than 3 weeks left before tax day, I thought I’d hit some of the highlights.

Personal note: I rented for all of 2022. I am really missing those write-offs this year!

Read over the list below to see what could pertain to your situation. And, no matter what, please remember to always consult with your tax advisor.

Mortgage Interest

Interest paid on home loans is deductible up to $1 million for a principal residence plus a second home. You’ll need to itemize your income taxes in order to claim this. Don’t just fill out the 1040-EZ without doing the math first to see whether itemizing or the standard deduction will result in the lowest tax bill – or highest refund – for you.

Property Taxes

Property taxes on all real estate are fully deductible. When you buy a home, check the settlement sheet to see if you reimbursed the seller for property taxes he or she prepaid for a period you actually owned the home. If so, include that amount in your property tax deduction.

Credit for Green Improvements

Not a tax break but a credit. It allows homeowners to take an annual credit of up to $1,200 off their federal income tax for making certain improvements that increase the energy efficiency of their homes, such as water heaters, furnace, boiler, heat pump, windows or roofing.

Investment Property/Rental Property

The cost of maintaining and marketing a rental property can be deducted from the income the property generates, without regard to the owner’s tax status. These expenses include mortgage interest payments, insurance, utilities, maintenance, repairs, advertising costs and management fees, as well as the non-cash cost of depreciation.

Home Office

You can deduct the costs of a home office that you use exclusively as your principal place of business.

Tax-Free Rental Income

If you rent out your own home for 14 or fewer days during the year, the rental income is tax-free.

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Be sure you are taking advantage of all the tax advantages you should be as a homeowners. If you would like a recommendation for a tax advisor or financial advisor, please let me know!

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Market Snapshot

Average days on the market dipped back down to around 15 days at the end of February. Housing prices saw a bit of a dip at the end of last year, corresponding with the rise in interest rates, but the prices have leveled off back to around where they were this time last year.