As a homeowner in Cresskill, it’s important to understand the various tax breaks for homeowners that may be available to you. From deducting property taxes to benefiting from the mortgage interest deduction, there are several tax breaks that can help you save money and reduce your tax bill. At NJLUX Real Estate, we are more than happy to help you navigate these issues. Keep reading to learn how you can save money when paying your property taxes.
Making Home Improvements for Medical Reasons
Making home improvements for medical reasons can significantly improve the quality of life for individuals with disabilities or medical conditions. Examples of these improvements include installing wheelchair ramps, widening doorways, adding grab bars, installing stair lifts, and accessible showers or bathtubs.
These home improvements may also be tax deductible as medical expenses, but it’s important to consult with a tax professional to determine eligibility. Funding options for these modifications include grants, low-interest loans, and tax credits or exemptions provided by some state and local programs.
Deducting Your Private Mortgage Insurance
Private mortgage insurance (PMI) is often required by lenders when a homebuyer puts down less than 20% of the home’s purchase price. Although it increases monthly mortgage payments, PMI premiums can be tax deductible for some homeowners.
The borrower’s adjusted gross income (AGI) must be below a certain threshold, which varies based on the tax year. Homeowners must itemize their deductions on their tax return and report the amount of PMI premiums paid on Schedule A to claim the deduction.
Deducting Your Property Taxes
Of all the expenses associated with owning a home, property taxes are among the most significant. However, homeowners can potentially deduct up to $10,000 in combined state and local property taxes on their federal income tax return. It’s important to note that this deduction is only available to homeowners who itemize their deductions on their tax return, rather than taking the standard deduction. Accurate records of property tax payments should be kept, and consultation with a tax professional is recommended when claiming the deduction.
Benefiting From Mortgage Interest Deduction
The mortgage interest deduction is a significant tax benefit available to homeowners, allowing them to deduct the interest they pay on their mortgage from their taxable income. To qualify, the mortgage must be for a qualified home, such as the borrower’s primary residence or a second home, and the homeowner must itemize their deductions on their tax return.
However, there are limits to the amount of mortgage interest that can be deducted, and the deduction is subject to various rules and qualifications. Homeowners are advised to consult with a tax professional for guidance on claiming the deduction and to keep accurate records of mortgage interest payments.
At NJLUX Real Estate, we’re a team of experienced and knowledgeable agents who specialize in luxury properties. We take pride in providing personalized service and using the latest technology and marketing tools to promote our clients’ properties. With our local expertise in the New Jersey real estate market, we offer tailored advice and guidance to our clients throughout the buying or selling process. Contact us today to discover how we can help you buy or sell a property!