Tax season is here, and if you own real estate, understanding what deductions you qualify for can help you keep more of your hard-earned money. Whether you’re a homeowner, seller, or investor, knowing what you can write off is key to lowering your tax bill. Let’s break down the top real estate tax deductions you shouldn’t miss.
1. Mortgage Interest Deduction
If you have a mortgage, you can deduct the interest you paid throughout the year on loans up to $750,000 (or $1 million if taken before 2018). This is one of the biggest tax breaks available to homeowners.
Tip: Check your Form 1098 from your lender for the exact amount of interest paid.
2. Property Tax Deduction
Homeowners can deduct up to $10,000 in state and local property taxes. While this deduction is capped, it can still provide significant savings.
Tip: If your property taxes seem high, consider appealing your home’s assessed value.
3. Home Office Deduction
If you work from home and use a dedicated space exclusively for business, you may qualify for the home office deduction. This allows you to deduct a portion of your mortgage interest, utilities, and even home maintenance costs.
Tip: The space must be used regularly and solely for work, your kitchen table doesn’t count!
4. Rental Property Deductions
If you own rental properties, you can deduct expenses like repairs, property management fees, insurance, and depreciation. These deductions help reduce your taxable rental income.
Tip: Keep detailed records of all expenses and consult a tax professional for guidance.
5. Capital Gains Tax Exclusion When Selling
If you sell your home, you may qualify to exclude up to $250,000 (or $500,000 for married couples) of your profits from taxes, if you’ve lived there for at least two out of the last five years.
Tip: Keep receipts for home improvements, as they can help reduce your taxable gain.
Final Thoughts: Maximize Your Tax Savings
Tax season doesn’t have to be overwhelming. Knowing what deductions you qualify for can make a big difference in how much you owe, or how much you get back. Don’t leave money on the table!
Need expert guidance? Reach out to Real Estate Exchange for real estate insights and strategies to help you save more this tax season.
Have tax questions? Be sure to consult with a tax professional to ensure you’re maximizing your benefits and staying compliant with current laws.
