potential homeowner tax breaks for 2022

5 Potential Homeowner Tax Breaks for 2022

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The due date for taxes is April 18, 2023. But before you file, be sure you are aware of the tax perks of homeownership. Check out these five potential homeowner tax breaks for 2022.

Mortgage interest 

The mortgage interest deduction is an itemized deduction. This means that for it to work in your favor, all your itemized deductions need to be greater than the standard deduction.

Note that for the 2022 tax year, those standard deduction amounts increased. For individuals, this deduction is now $12,950, and for married couples filing jointly, it is now $25,900. For the head of household, this deduction went up to $19,400. And if you are 65 or older, you can add on an extra $1,400 per person if you are married and filing jointly or an extra $1,750 if you are a single filer.

And remember—the more recent your mortgage, the greater your tax savings will be.

Property taxes

Property taxes are on that itemized list of all your deductions that must add up to more than your standard deduction.

Taxpayers can take one $10,000 deduction. This deduction is capped at $10,000 for those who are married and filing jointly.

Note: If you have a mortgage, your property taxes are built into your monthly payment.

Interest on a home equity line of credit

If you have a home equity line of credit, or HELOC, the interest you pay on that loan is deductible only if that loan is used specifically to “buy, build or improve a property.”

Essentially, you will have some cash if your home needs repairs or upgrades. But you cannot use that money for things such as weddings or college tuition.

You can deduct up to the $750,000 cap—this is for the amount you pay in interest on your HELOC and mortgage combined. But note, if you took out a HELOC before the new 2018 tax plan for anything other than improvements to your home, you cannot deduct the interest.

Home offices

Are you self-employed, with your home office being your principal place of work? Good news! You can deduct $5 per square foot, up to 300 square feet, of office space. The maximum deduction your home office can receive is $1,500.

For those taking this deduction, know that there are very strict rules on what constitutes fully-deductible home office space.

In addition, understand that if you are still working remotely, you are still a W-2 employee and are not eligible for this deduction under the CARES Act.

Home improvements

To receive the home improvement tax break, your improvements have to exceed 7.5% of your adjusted gross income.

Deductible improvements can include widening doorways, lowering cabinets, fixing electrical or adding stairlifts. For some homeowners who plan to add renovations such as wheelchair ramps and grab bars in the bathrooms, for example, the cost of improvements can result in a nice tax break.

You will need a letter from your doctor to prove that these changes were medically necessary.

Summary

Be sure you keep these potential homeowner tax breaks for 2022 in mind when filing your taxes in 2023. These breaks and homeownership tax perks can save you money!

Finally, continue reading our blogs for more real estate tips and news.

things to keep in mind when buying a home in the fall

8 Things to Keep In Mind When Buying a Home in the Fall

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Just as the seasons change, so do peak real estate times. That means now is the ideal time to share eight things to keep in mind when buying a home in the fall that may work to a buyer’s advantage!

Less competition.

Fall is typically considered the off-season in real estate. Therefore, buyers may have less competition.

What’s more, inventory more often than not tends to stay the same, which means there are still plenty of homes available.

Buyers have time to negotiate.

Less competition also means the odds of getting caught in a bidding war go down. Hence, buyers can take back a little more control.

This includes everything from negotiating the price to asking for your preferred closing date.

More available help.

In general, since it’s slower, real estate professionals and other service workers have more time on their hands. Thus, they have more time to focus on you!

Expect prompt responses from your Realtor, lenders, contractors, inspectors and more this time of year.

Sellers are motivated.

Some sellers may have come on strong in the peak spring and summer months. They may have overpriced their properties or struggled to find the right buyers.

New sellers usually have a good reason for listing their homes this time of year. In the end, all signs point to motivated sellers, which is good news for buyers!

You might enjoy better rates.

As the year winds down, mortgage lenders and bankers may be open to discussing a slightly better deal just to get the deal done.

No matter what, it’s always good to shop around and ask about savings when it comes to interest or even down payments.

First-time buyers get tax breaks.

Remember, first-time homebuyers receive property tax and mortgage deductions. This holds true even if you don’t close until December.

You’ll see the house in a different light.

Next on the things to keep in mind when buying a home in the fall is how it looks without the spring flowers and summer sun. When you shop for a house in the fall, you may get a better idea of what it’s like on a cloudy or rainy day.

You may also get a better look at the exterior without all that landscaping acting as camouflage.

Save on home décor.

Who doesn’t love shopping for their new home? If you move into your new home at the end of the year, you will hit the jackpot on year-end and holiday sales!

You will be able to bargain hunt for everything from new furniture to new appliances to new throw pillows.

Summary

Did these things to keep in mind when buying a home in the fall come as a pleasant surprise? If you think the time is right to start your home search, connect with a local Lee County Realtor today. For more industry insights and home buying-and-selling tips, keep reading our blogs.