The Potential Tax Benefits of Owning Your House

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As we are in tax season everyone is preparing by gathering up all of their necessary documents to either do their own taxes or send everything off to their accountant to complete. Last year there were changes made to the tax code, but this year not much is different. Here is a good refresher regarding the benefits that you can enjoy by being a homeowner. Be sure to check with your account for more details on what is best and/or applies for you.

Mortgage Interest

If you started your mortgage before December 15, 2017 then you can deduct interest up to $1 million, but if after, then only the first $750,000. The thing to note on this is that mortgage interest is an itemized deduction so you should only take this if all of your itemized deductions exceed the standard deduction amount. For married couples the amount is $24,400, for individuals it is $12,200 and for head of households it is $18,350.

Private mortgage insurance

If your down payment was less than 20% on your home when you purchased it then you are most likely paying private mortgage insurance or “P.M.I.” You can take the deduction of the interest that you paid on this, but again just keep in mind that you only want to do so if your deductions exceed the standard deduction.

Interest on a HELOC

This is another way to help add to your deductions. If you have taken out a HELOC (home equity line of credit) that is used to make improvements to your property then you can deduct the interest. The two stipulations are the loan must be for home improvements (not money taken out to pay off credit card debt or pay for a wedding, etc.) and the total amount of combined interest that can be deducted for your primary loan and the HELOC is capped at $750,000.

Property tax

This amount is capped at $10,000 for a deduction for married couples filing jointly. Once again, this is important to note where all of your deductions must add up to more than the standard deduction ($24,400 for a married couple) for it to be beneficial to you.

Home office

This is a great option for anyone who is self-employed and works from home where you can deduct $5 per foot of office space up to 300 square feet for a maximum deduction of $1,500. There are rules set in place for this such as you cannot take this if you only occasionally work from home, it can be a great deduction.

Home improvements for “aging in place”

If you are of an older age, plan on staying in your home and need to make some necessary adjustments to remain in it then these can potentially be deductions. Stipulations are that you will need to have a doctor’s note affirming the necessary changes and the improvements will need to exceed 7.5% of your adjusted gross income. Improvements may include things like widening doorways, adding wheelchair ramps, grab bars, etc.

Beth Dickerson

Boston, MA

Primary phone
(617) 510-8565
Email
[email protected]
Address
277 Dartmouth St. , 2nd Floor,
Boston, MA 02116

About The Author

One of Boston’s most reputable real estate brokers, Beth Dickerson has achieved more than $2 billion in sales and thousands of successful real estate transactions over her nearly thirty-year tenure. Beth has received national acclaim from the real estate industry and represents some of the most prestigious residents and properties across Massachusetts. Her enduring record as a top producer comes from the intuitive gift of sensing her clients’ needs. She has built a business that is referral-based at its core—a testament to her relationship-driven approach and penchant for exceeding expectations. It is this nuanced expertise that Beth leverages to guide many of her clients-turned-friends through some of the greatest milestones of their lives.

Beth was the proprietor of her own real estate company before joining the residential division of R. M. Bradley in 1993, where she was a top producer for more than a decade. In 2003, she founded her own boutique real estate firm, Dickerson Real Estate, before merging with Gibson Sotheby’s International Realty in 2007. Today, Beth attributes her success to her comprehensive marketing and advertising strategies, exclusive contact network, and unparalleled insight into neighborhoods like Back Bay, Beacon Hill, the South End and Waterfront. With an understanding that no two clients are alike, she works with clients in all phases of life—from first-time buyers to luxury developers, seasoned sellers and beyond. Beth offers clients the resources to aggressively market their property locally, nationally and globally, and her attention to detail, drive and enthusiasm are unmatched.

Beth has appeared in prestigious media outlets including The Wall Street Journal, Mansion Global, The Boston Globe, and Boston magazine, and was prominently featured as Greater Boston’s real estate expert on WCVB Chronicle in 2020. She has had the honor of serving as President of the Downtown Council of the Greater Boston Real Estate Board. For over ten years, she has been a Co-Chair and Committee Member for the Massachusetts General Pediatric Hospital for Children’s Storybook Ball. She serves as a Board Member of the Community Music Center of Boston and a member for the Perkins School for the Blind, Emerald Necklace Park Conservancy, Justine Liff Luncheon, Youth Villages and the Boys & Girls Club of Boston, among dozens of other organizations throughout the Boston area.

A long-time resident of Boston’s Back Bay, Beth was an active member of the community as she raised her two children: she served as treasurer of the Clarendon Street Playground and was an avid supporter of the Hill House Community Center.