What will increase my tax return?Ready?
OK, here it is: Buying a new home!
That's right, buying a new home this year may help you get more money back when you file your tax return next year, especially if you've always taken the standard tax deduction versus an itemized one.
Because when you own a home, the IRS lets you claim certain expenses by itemizing costs that are included in your house payment, such as real estate taxes, home mortgage interest, and mortgage insurance premiums.
What's cool about that is you can continue to take these deductions for as long as you have a house payment, which means you'll most likely get a sizable break on your taxes for many years to come.
But it doesn't stop there.
When you move, you may deduct your moving expenses, such as the cost of movers and up to 30 days of storage fees. In addition, certain home improvements may help increase the size of your return. But be careful, because the IRS has strict guidelines when it comes to this.
Once you itemize your home ownership costs, you can also itemize other allowable expenses, such as charitable gifts, work-related education benefits, and medical and dental benefits to name a few.
Buying a home instead of renting (or living in your parent's basement) may seem like an expensive proposition. However, as you've seen above, homeowner tax deductions may pave the way for higher tax returns - and who doesn't want more money in their pockets?
What would you do with the extra cash from a larger tax return? Invest? Use it for another major purchase? Or how about taking that island vacation you've been dreaming about for years?
As you can see, there are many financially sound reasons to consider home ownership this year. If you want to take advantage of home ownership deductions on your tax return, then it's time to start looking. Happy house hunting!
Written by Stanley Martin Homes
Submitted on 5/15/2017 Posted in Northern Virginia
Category: The Study