Thomas Murphy - Pine Shores Real Estate



Posted by Thomas Murphy on 3/17/2013

One benefit of owning a home is that come tax time, there are a variety of things you can claim deductions for. Whether you have someone prepare your taxes for you, or do them yourself, it is good to know all the types of deductions you can take to ensure you lower your taxes as much as possible. First things first, in order to take advantage of the deductions you will likely need to itemize, which is a bit more complicated than the EZ form you previously used. Whether you file a single or joint tax form, you get an automatic deduction for yourself. But when you itemize, you often make out better with a higher overall deduction. Each year, the various deductions change, so it's always good to keep your eye open around tax time for updates for the tax year. A quick Google search can give you some places to start. Even deductions that have been around for a long time can change on the specifics, so make sure you stay informed! Here are a few deductions that are standard:

  • Mortgage interest paid in the tax year,
  • Points you paid on your mortgage,
  • Property taxes paid including any that were prepaid and listed on the settlement sheet when you closed on your home,
  • Energy efficient improvements (there are only specific items that this can be used on and can vary year to year),
  • Medical expenses more than 7.5% of the adjusted gross income (this one is scheduled to increase to around 10% in 2013, making it harder to meet)
As mentioned earlier, deductions can change each year. In past years you were able to deduct energy efficient home improvements such as adding insulation, or there were incentives for being a first time home buyer. You never know what other deductions may pop up, so it's always worth saving receipts just in case!  




Categories: Money Saving Tips