Are Any Part of My Home Payments Tax Deductible?

Homeowners know all too well how enormous repayments can be, never mind how much it costs to keep a home well-maintained and in good condition. Hence the reason why so many Americans are keen to find out if any part of their home payments are tax deductible. The great news is that there are multiple tax benefits that come with owning a home. We provide details on each of them below.

Property taxes

In most cases, property taxes are tax deductible. According to new law, the maximum amount of state and local property, income, and sales taxes that can be deducted at any one time is $10,000.

Mortgage interest deduction

All homeowners know just how much interest they wind up paying over the course of their mortgage. Luckily, this interest is also usually deductible. You will be able to determine how much mortgage interest you paid in box 1 when you receive your Form 1098.

Points paid when buying your home

This one applies to home owners who have only recently purchased their home and who paid points in order to land a better interest rate. Check box 6 in Form 1098 to find out how much you paid for points, which are tax deductible.

Private mortgage insurance premiums

If you opted for a traditional mortgage and you put down a deposit that was less than 20% of the value of the home, you likely paid private mortgage insurance premiums. The amount paid can be found in box 5 of Form 1098 and, once again, is usually tax deductible.

Home office deduction

Are you lucky enough to own your own business and work from home? Then you will be eligible to claim the home office deduction. You can choose to claim up to $1,500 which is the set dollar amount of $5 per square foot of your home used for your business up to 300 square feet. Alternatively, you may also claim based on a portion of your home expenses.

For more information, contact the Certified Public Accountants at Georgen Scarborough Associates.

Tax deductible donations: Subtract the value 
of your charitable gifts from your taxable income

Are you an individual who regularly donates to charities and charitable organizations? If so, you may be eligible to claim sizeable tax deductions. Here is what you need to know about how much you can deduct, how to claim tax deductible donations, as well as various qualifying criteria to keep in mind.

How much can I deduct?

You will be eligible for a tax deduction if your donation is given to a tax-exempt organization, as defined by section 501(c)(3) of the Internal Revenue Code. In most cases, you will be able to deduct up to 60% of your adjusted gross income via charitable donations. However, this does depend on the type of contribution that you made and the organization that received it.

If you exceed the limit, you will still be able to deduct the excess from tax returns over the next five years via carryover.

How to claim tax deductible donations

The only way is to itemize at tax time. In other words, you will need to fill in Schedule A along with the rest of your tax return. Try to do this ahead of the deadline, as it can prove much more complex than the average tax return.

Is volunteer work tax deductible?

Unfortunately not. However, mileage related to your volunteer work can be – as long as you are volunteering at a qualified organization.

Looking for a company to assist you with your tax deductible donations or your tax filing in general? Get in touch with the Certified Public Accountants at Georgen Scarborough Associates today!