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Tax Tips for Home Owners

Owning a home can introduce a lot of expenses -- but come tax season, it can also qualify you for money-saving deductions.

Photo: Shutterstock / The Nest

Are you a home owner? Good news! You can deduct qualified mortgage interest on your main home (and a second home) if you itemize deductions on the form Schedule A. Remember, you must be legally liable for repayment of the loan in order to deduct the loan interest.

When you get ready to file your taxes this year, keep the following tips in mind:

  • You can fully deduct qualified mortgage interest paid on your home mortgage. The loan must be secured by your main or second home. The deduction is limited to interest on $1 million of acquisition debt (a loan used to buy, build or substantially improve your home), plus $100,000 of home equity debt.
  • You might be able to deduct points (also known as loan origination fees), maximum loan charges or loan discounts. These are additional charges paid to obtain a mortgage secured by your main home.
  • If you have a vacation or other second home and you didn’t rent it out, you can fully deduct the mortgage interest, up to the loan limits explained above
      • You can increase the amount of your deduction by paying your December payment that’s due in January by December 31. This might work in your favor if you´re itemizing other deductions, like charitable donations.

      Get the full list of details by clicking here.

Ready to do your taxes? Head over to H&R Block and sign up to get a 20% discount on their tax services -- just for Nesties!