Greetings from the Vermont Mortgage Company! We hope you had a restful weekend, and are energized for the week ahead! And speaking of what’s ahead, tax season is coming up. As we have discussed in our previous blogs, there are many benefits for owning a home as opposed to renting. One of these is tax benefits, and knowing about them and which ones you qualify for can save you some cash! Let’s dive in and see if there’s anything that can help out.
1 – Mortgage Interest
This is probably one of the biggest ones available to you. You are able to deduct your interest that you pay over the course of the year. If the mortgage is young, you’ll get greater savings. This is due to the fact that the first few mortgage payments are almost entirely interest. If you have just gotten a mortgage, this can save you thousands!
Along those lines, your Private Mortgage Insurance (PMI) may also be tax deductible! This is renewed every year, so keep an eye out to see if it continues for 2017.
2 – Property Taxes
Another way to save a good chunk of money is your property tax. These are often deductible and can once again save you up to thousands. These taxes are also usually included in your mortgage payments, if you have one. Always check to make sure you’re getting the most out of your taxes!
3 – Energy Efficiency Renovations
Here in the Green Mountain State, going green is growing ever more popular! Installing things like solar panels and wind turbines not only lowers your carbon footprint, it can also be used as tax credits. Up to 30% of the cost for installing these renovations can be claimed. Other changes such as HVAC, central air conditioning, storm doors and efficient windows can also get you back a few hundred.
4 – Renovations for Care
If you or a loved one is growing older, therefore wiser, you may be wanting to install things like wheelchair ramps and handrails for bathrooms. These renovations for “age in place” homes can be deducted from the amount that it improves your home value. So if you pay $5,000 for a renovation, and it increases your home value by $4,000, that is $1,000 going back to you!
Just remember this: your deduction is only valid if it costs more than 10% of you adjusted gross income (AGI), or if you’re older than 65, 7.5% more.
5 – HELOC Credit
Much like a mortgage, the interest on a Home Equity Line Of Credit (HELOC) can be deducted as well! Only if it used to repair/work on the home. The amount you’ll save varies, so checking online for a calculator can help you see what is available for you!
There are many ways to save money and get tax breaks, not just for owning a home. Make sure to stay on your toes so you know what is available to you! We are here to make your life easier, so feel free to connect with us at 802-863-2020! From all of us here, have a lovely rest of the week!