If you are still looking for real estate tax breaks, I have some tips to help you find what you may have missed. It’s easy to miss tax deductions since there are over 70,000 pages in the tax code. That’s a lot of wording that most Americans have never heard of or seen. So, whether you are doing your own taxes or having a professional prepare them for you, you should be looking for these three most commonly missed tax breaks.
Real Estate Related Tax Deductions:
Green Improvements – Going green with your home improvements will give you tax breaks both state and federal. Energy efficient home improvements help your wallet with tax savings and utility savings. If you installed energy efficient windows or appliances, low- flow toilets, tankless water heaters or solar power in 2013, gather your receipts and deduct your total cost.
Mortgage Interest – When you own a home, you can deduct the interest paid throughout the year. In most cases you will pay more interest than principle, so why not deduct that large amount. You can write off up to $1 million of mortgage debt. Over 40% of American’s don’t take advantage of this interest tax deduction or the property tax deduction. There’s absolutely no reason not to take advantage of this if you are paying it.
Cancellation of Debt Income – If you had a short sale or foreclosure in 2013, you can deduct that from your taxes. The act has now expired but there is still talk about extending it through 2014 to help homeowners who suffered most during the real estate recession. So, take advantage of those eligible tax deductions for even more savings.