2015 List of Tax Breaks for Homeowners

Luckily, as a homeowner, you are entitled to a few tax breaks that will drive down your tax bill and maybe put you into refund territory.

The dreaded tax season is upon us again so collect your receipts, dig out those W-2s and get ready to hunker down. Luckily, as a homeowner, you are entitled to a few tax breaks that will drive down your tax bill and maybe put you into refund territory.

Lets have a quick look at the most common discounts for homeowners:

Mortgage Interest

This is the big one. You can claim the interest you pay on your mortgage every year. Mortgage interest is definitely one of the most common deductions that is taken by taxpayers.

There is a cap of $1.1 million dollars when it comes to the interest deduction but the majority of us are never going to hit that number. The deductions can cover multiple loans so if you have a second home you can also deduct the interest from that loan, as long as the total stays under the cap.

One point of warning, deducting the interest on home equity loan money that is not used to improve the property is not deductible so make sure you have plenty of proof if you are deducting home improvements.

Mortgage Insurance

Many people are unaware that mortgage insurance is also deductible. This coverage is often referred to as private mortgage insurance or PMI, which is different than homeowners insurance. Mortgage insurance is often required if a homeowner puts down less than 20 percent, its guarantees to the bank that the mortgage will be paid if you default. It you have PMI it is deductible from your taxes.

Mortgage Points

If you racked up any points when you took out your loan, you can fully deduct this amount. One point is equal to 1 percent of the loan principal so if you have one to three points, this can add up to a fairly big amount. Check with a tax professional if you can deduct your mortgage points.

Going Green

This deduction is not always available, it depends on the mood of Congress so check with a tax professional if you can claim any green energy credits you may have accumulated over the year.

Installing energy efficient doors, windows or heating and air conditioning units could save you a bit on your taxes. This credit tops out around $500.

Property Taxes

Real estate taxes are fully deductible so make sure that you take advantage of this deduction. Be aware that you are not allowed to deduct escrow money until it has been used to pay your property taxes.

Home Office Deduction

It is possible to deduct home expenses related to your home office but it’s important that you clearly document what you are deducting. Its possible to claim a portion of your home repair costs, insurance and even deprecation if you spend a lot of time working out of your home.

Casualty Losses

If your home is severely damaged, you may be able to claim a break on your taxes for any big losses incurred. According to experts your loss has to be more that 10 percent of your income. As an example, if you earn $60,000 a year you will need to cover $6,000 in losses out of pocket before you can start deducting for additional losses.

It is important to note that these have to be out of pocket losses, you cannot deduct losses that were covered by your insurer. Documentation is always necessary so make sure you have photos of your possessions.

Moving Costs

If you have moved due to a new job, its possible to deduct some of your moving costs. There are a number of IRS requirements but if you meet them, this can be an excellent way to lower your taxes. Moving costs can include travel, expenses for lodging and even storage fees for your household items.

This is only a partial list, be sure to consult a tax professional to make sure that you get every deduction you are entitled to receive.