Home Sweet Home
All too often, a home feels like a giant vacuum that sucks up money. But come tax time, you can take advantage of a number of home ownership-related tax breaks that may help offset your Monster Vac.
Mortgage interest, including any points you paid if you bought or refinanced during the year, are deductible. Also, if you make your January mortgage payment in December, you can deduct that month's interest this year as well.
Upgrades, including green-energy improvements such as additional insulation, energy-efficient windows and whole house fans, often offer tax credits, which means the credit amount is deducted from the amount of taxes you owe. Get those improvements finished by Dec. 31 to claim the credit this year.
Author's Note: 10 Surprising Tax Preparation Tips
As a small business owner who works from home, I was most surprised -- in a good way -- by the simplification of the home office tax deduction. For years I've struggled with how to figure out how much to deduct -- I'm a writer, not an accountant. That one change, though, makes me think I can maybe do my own taxes this year, with the help of an online program for guidance. If you're on the fence, take a look at new tax regulations and do a little bit of research up front. Maybe this is the year you can dive into the deep end of the tax pool on your own. I'll look for you there -- I'll be the one wearing the life preserver, just in case.
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Many Americans don't think about their tax bills until the new year. But there are things you need to do before Dec. 31 if you want to pay less later.