You may visit our article Should I itemize my tax deductions for more information. The benefits a home owner gets from his tax deductions, as outlined in this article, are applicable only when they itemize. If you cannot decide whether to itemize your deductions or not, please leave it us and we can help you.
The first deduction anyone think about is the mortgage payment. This is a big check that goes to your lending company, every single month for the duration of your loan. Good thing is, you can deduct your mortgage.
There is a limitation that the property should be less than $1Millon in value. Another good point is, you can even deduct your home equity or line of credit (interest only), which give you a flexibility of enjoying the premium of your house value appreciation. Many people use it for the college expenses for their children. Though you cannot use entire amount of your home equity , there is still a part that you can deduct.
There is another interesting deduction you can claim for your mortgage with some restrictions.
You can deduct the mortgage you pay for second property.
Many people don't know that the second property need not be a house. If you have cooking, bath and sleeping, you can claim a deduction. This extends the property definition to Boat or RV. In case of a vacation rental, you can claim, only if you stay there for a specified period every year. If you rent it all the year, a vacation rental mortgage cannot be claimed for deduction. Home owners also allowed to deduct the property taxes they pay.
IRS keep changing the rules. You can refer their publication 530 for most recent here
If you are a small business owner,consider our article on Tax Tips For Small Business Oweners
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