Although owning a home may be the American dream, there can be benefits as well as cons, such as high maintenance expenditures. On the plus side, having a house gives you access to certain tax benefits that can significantly increase your tax refund.
For homeowners, reviewing and adjusting your tax status in advance of filing your income tax returns in early 2023 might be facilitated by learning about your tax benefits now.
Although the majority of homeowners with mortgages are aware that they can deduct payments made toward their loan interest, many other tax breaks and credits associated with home ownership are less well known. To receive the largest tax refund possible in 2022, learn about all the various tax reductions for homeowners.
These papers are not official tax forms for 2022, which won’t be accessible until January 2023.
How tax breaks work for homeowners
The majority of homeowner income tax benefits are tax deductions, which are decreases in your taxable income. You pay less in taxes the lower the percentage of your income that is taxed.
You must choose whether to itemize deductions, such as gifts to charities and state taxes, or to accept the standard deduction, which is $12,950 for single filers, $25,900 for joint filers, or $19,400 for heads of household or married filers filing separately.
You must use Form 1040 Schedule A to itemize your deductions in order to qualify for homeowner tax deductions. Whether your itemized deductions exceed your standard deduction will determine whether you choose to itemize. You can easily decide whether to itemize using the best tax software.
You are not required to itemize when claiming homeowner tax credits. You can typically receive those credits whether or whether you itemize deductions because they immediately lower the amount of taxes you owe.
