With the 2013 tax season coming to an end on April 15, there is very little time left to finish your taxes and hopefully reap the reward of a hefty tax refund check. There are certain tips that homeowners can do to increase their refund amount. Below are five useful tax tips that all homeowners should know.
- Deductions for mortgage interest: This allows homeowners to reduce their taxable income by the amount of interest paid on their loan. If you recently bought a home or refinanced, this is definitely not something to overlook since the majority of mortgage payments go towards interest in the beginning.
- Deductions for mortgage insurance premiums: Insurance premiums are still deductible which helps homeowners since insurance is normally required for loans with a balance of more than 78 percent of the home’s value.
- Deductions for home office use: If you have a home office that is used exclusively for a small business, chances are you are able to claim a deduction for any office related expenses such as repairs and depreciation.
- Credit for qualified home improvements: The American Taxpayer Relief Act of 2012 allowed homeowners a credit of up to $500 for making improvements that increase a home’s energy efficiency. This would include improving insulation, windows, roofs and other energy efficient upgrades.
- Unqualified home improvements when selling home: Although not all home improvements and renovation projects would qualify as energy efficient, these unqualified home improvements play an important role when selling your home. Homeowners are able to deduct any renovations that helped boost your home’s value from your total profit.