From Trulia Real Estate 101: just in time for tax season, don’t miss these tax breaks
- Mortgage Interest Tax Break
This seems incredibly obvious as the mortgage interest tax break has long been one of the prime motivations to own a home in the first place. Yet, apparently some do not take this tax break, primarily because they don’t itemize their dedeuctions, which is necessary to take the mortgage interest and property tax deduction. It is estimated that only 63% of homeowners itemize their deductions.
- State and local tax breaks for green home improvements
In these days of increased energy-efficiency awareness, many states, counties or cities offer tax breaks for items such as insulation, dual-paned windows, tankless water heaters, low-flow plumbing appliances, and solar panels. If you’ve done any of these improvements check the local regulations and dig out those receipts.
- Cancellation of Debt (COD) Tax Exemptions
Extended through 2014, the 2007 Mortgage Debt Forgiveness Relief Act, has temporarily exempted COD from incurring income tax liability to avoid penalizing homeowners for these sorts of settlements and resolutions to upside-down home mortgages. If you fit into this category, you may be able to take advantage of this exemption.