There are many compelling reasons to own a home – some personal, some financial. While you’ll continuously reap the benefits of owning a home, you’ll really catch a break during tax season.
Happy homeowners get to experience some appealing tax benefits. Mortgage deduction is one of them, which allows you to deduct the mortgage interest paid on your home. This is a big one! You can claim the deduction on Schedule A of your tax return, and it can be used for multiple properties- including your fancy boat or RV (if it has amenities for cooking and sleeping, as well as a bathroom). The only interest paid that doesn’t quality for this tax break is interest paid on the portion of a loan that is over $1 million, but not to worry! Paragon Accountants will review your loan value and interest deduction to ensure you aren’t overstated your interest deduction, that’s what we’re here for!
To calculate your mortgage tax deduction, use the calculator here.
You will also receive a tax break for property taxes paid and mortgage insurance. Interest on a home equity loan or line of credit that were used to buy, build or improve your home is also a deductible expense, again reported on your Schedule A on your personal return.
Whether you’re in the market for the house of your dreams, or are currently creating a new addition to your homey space, it’s important to keep in mind that you will build equity every month that you make a mortgage payment. Mortgage goes down- equity goes up! This inevitable savings plan makes owning a home a more affordable alternative than renting long term, as the interest payment will eventually become lower than the fair market of rent payments in your neighborhood.
No matter where you fall in the grand world of home buying and owning, Paragon is here to help. Please contact us with any questions -big or small- so that we can help your home and tax season thrive!
