If you’re a new Katy homeowner, make sure you’re aware of all the tax benefits you can enjoy when filing your taxes for 2017! When it comes to taxes, it pays to be a homeowner, literally. As your Katy real estate agent, I am here to fill you in on some of the best tax benefits to know about, and what to know for tax season next year, due to changes in the new tax plan that went through.
This is probably the best tax break of owning a home! You can deduct the interest on a mortgage up to $1 million. The more recent your mortgage, the bigger your savings, because you pay more interest in the beginning. Nothing is changing when you file taxes for 2017. Next year, homeowners with a mortgage before Dec. 15, 2017 can still deduct interest on loans up to $1 million. Homeowners with a mortgage after that can deduct interest up to $750,000.
Most of the time, you can deduct property taxes on your 2017 tax return. If you have a mortgage, your taxes are usually built into your monthly payment. Use a tax professional to help you calculate your property taxes. The average household property tax is over $2,000, so this could mean big savings!
Private Mortgage Insurance
If you put less than 20 percent down on your home, you may be paying private mortgage insurance. The tax deduction for this expired, but the new tax bill made it available for the 2017 tax year. This deduction is for itemizers only. For 2018 taxes, the standard deduction nearly doubles, so it’s expected that very few taxpayers will itemize deductions starting next year.
While many of these tax credits have expired, there are still two available. That is for solar electric and solar water heating equipment. These credits are available through Dec. 31, 2021. The percentage of the credit varies based on date of installation, but from now until Dec. 31, 2019, 30 percent of the expenditures are eligible for the credit.
If you work from home, you can take $5 per square foot for up to 300 square feet of office space. This allows for a maximum deduction of $1,500. There are strict rules about what counts as a home office, so be sure to look into it. Next year, this deduction will only count for self-employed people who don’t have an office they could go to.
Other tax benefits that may be available for Katy homeowners includes home improvements to age in place, andinterest on a home equity line of credit. For more information on all of this, check out this realtor.com article.
Ready to buy a Katy home so you can enjoy these tax benefits next year? Ready to sell? Have questions about the Katy real estate market? I am your Katy real estate agent, standing by to answer questions and guide you through the home-buying and/or home-selling process this year!