Date Archives: January 9th, 2023

Painting, whether it's indoors or out, is a great way to give your home a fresh new look. While it's relatively easy and inexpensive to update your home with paint, there are some pitfalls you'll need to pay attention to. Here are a few tips from our real estate agents for avoiding common painting issues.

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After your down payment, closing costs, and other additional fees, buying a home adds up. But there are some pretty great benefits to being a homeowner too. These tax deductions can potentially save you thousands of dollars when all is said and done. Let's take a closer look at seven of them and what they mean for you. 

#1 Mortgage Interest

Do you have a mortgage? Great. You will definitely want to take advantage of this one. Part of your monthly payment works to cover what you've borrowed, but another part of it is dedicated to paying off interest. 

As a single or married homeowner that is filing jointly, you can deduct interest that is paid on up to $750,000 of your balance. If you are married but choosing to file separately –  up to $375,000 each. 

Remember, if you purchased your home between October 14, 1987, and December 15, 2017, you can deduct interest paid on up to $1 million, and before October 14, 1987, all interest paid. 

#2 Home Equity Loan Interest 

What is a home equity loan? In essence, it is a second mortgage on your home. Taking out a home equity loan gives you the ability to borrow funds based on the equity you've built in your home as collateral.

If your home is worth $500,000, and you still owe $400,000, you have $100,000 of equity. 

Similar to mortgage interest, you can deduct interest from your home equity loan as well. 

#3 Property Taxes

Depending on where you live, property tax deductions can be very profitable. If you are single or married filing separately, you may deduct $5,000 each per year. If you are married and filing together, you may deduct up to $10,000 per year. 

#4 Discount Points 

Discount points are an optional aid you have at the time of closing to lower the interest rate on your loan. How does it work? One discount point equals 1% of the mortgage amount. 

If you chose to purchase these discount points at the time of closing, there is a good chance that the money you paid is tax deductible. 

#5 Mortgage Insurance (PMI)

Private mortgage insurance, or PMI, is a type of insurance that protects the lender if, for some reason, you stop paying on your loan. Depending on your annual income, it can be deducted on your itemized tax return. 

#6 Necessary Home Improvements

Unfortunately, fun renovations to your perfectly-functional kitchen won't apply, but if you need to make improvements to your home on a more serious scale, you may be able to deduct the amount from your taxes. 

Some examples are capital improvements, energy efficiency improvements {depending on where you live}, or medical improvements, like adding wheelchair-accessible features, etc. 

#7 Home Office Expenses

Do you run your business from home? You may be interested in deducting home office expenses. This one is dependent on a few specific factors. 

- Are you using the space exclusively to run your business?

- Are you using the space regularly?

- How large is your space in comparison to the rest of your home?

- Do you actually run the business? {Does not count if you are working from home for an employer}

As you can see, there is a pretty fine line here, but if it applies to you, it is definitely worth looking into. 

We hope this blog gave you a better understanding of some of the tax deductions you can take advantage of as a homeowner. Talk to a tax professional or an experienced real estate agent with further questions about tax deductions. 

Real estate agents at The Masiello Group are eager to let their experience work for you. 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.