Most Windham County homeowners, when you ask them why they like owning rather than renting, will say that they get great tax deductions. Homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns. With the tax season almost upon us, it’s critical to know what you’re entitled to, so that you can claim it. Here are some 2013 tax tips to help you get beneficial tax reductions and to help you avoid homeownership- related tax traps.
Itemize your return in order to claim your deductions. Nearly 40% of homeowners lose out on their major tax advantages every year because they fail to itemize their income taxes. It’s a good idea to use tax software such as TurboTax that will automatically do the math for you on whether itemizing or taking the standard deduction will result in the lowest tax bill.
Plan ahead and be strategic when taking a home office deduction. According to the Small Business Administration, the average home office deduction is $3,686. If you multiply that by your tax bracket, you will save that amount on your taxes by writing off your home office.
Any home efficiency improvements can be deducted. Many items covers under residential energy efficiency can provide tax relief, including new solar panels or certain hot water heaters. There are also deductions that can be made for home office improvements, as well as for medically necessary changes, such as an entry ramp or a handicap-accessible bathtub.
Knowing what to deduct and how to claim certain items on your income taxes can save your family a significant amount of money. At Byrnes Agency, we understand the financial obligations you face as a homeowner. Homeowners throughout Connecticut and Southern New England look to us to protect their homes in the event of damage or liability. For more information about our Windham County Homeowners Insurance, please contact us at one of our various locations.