The top 10 tax deductions for homeowners

It is tax time again. However, if you are a homeowner there is a very good chance that you can find a number of programs that can help you with this tax time of the year. There are 10 ways to save on these taxes.

•Deductible Mortgage Interest — Interest on the loan of your primary residence is tax deductible.

•Tax Break for Home Refinances — If you refinanced, you may be able to write-off the points paid for the new loan. But there is a twist: you’ll have to deduct them proportionately over the life of your loan. So, if your new loan has a 30-year term, you’ll deduct 1/30 of your points each year. Another thing to consider: if you’ve refinanced before, and you have points from the previous refinance that you haven’t finished deduction, you can write off the rest of those points in the year you refinance.

•Deductible Loan Points for Homebuyers — The points you pay at closing when you buy a home are deductible on your income tax statement for that year. If the seller paid some or all of your points for you, you may be able to deduct those seller-paid points.

•No Income Taxes on Capital Gains — Thanks to the 1997 Tax Act, once every two years, single homeowners can realize a tax-exempt profit of up to $250,000 — as long as the seller owned and occupied the home as a principal residence during any two of the last five years. Married homeowners who file jointly on their tax returns do not have to pay taxes on up to $500,000 of gain when they sell their primary residence.

•Home Improvements — Although you can’t deduct the expenses associated with home improvements, keep in mind that making improvements to the home may increase the purchase price. This underscores the value of keeping all of your receipts from home improvements; they may help you prove your home’s worth at resale and reduce the potential taxable gain when selling your property.

•Real Estate and Property Taxes — State and local property taxes may be deducted as an expense; however the real estate taxes are only deductible during the year they were actually paid to the government.

•Home Office — If you have a qualified office, you may be able to deduct costs associated with maintaining the portion of your home exclusively used for business. For example, 100 percent of your expenses related to the office such as painting and upkeep are deductible, as well as a portion of indirect expenses sch as the cost of utilities and garbage pickup.

•Limited Moving Expenses — Homeowners who have recently relocated for work may be able to write off the cost of moving themselves, their household goods, their vehicles, and you may be able to deduct a portion of expenses, such as reasonable costs associated with the move. Restrictions do apply. For instance, the new job must be 50 or more miles farther from the old home than was the old job.

•Health-Related Improvements — Any home improvements for medical purposes can be deducted entirely from your taxes as long as the improvements do not add to the overall value of the home and are for a chronically ill or disabled person. If you qualify, you may be able to deduct a portion of expenses such as a swimming pool for treating polio victims or an air conditioner to alleviate a specific medical condition.

•Vacation Homes — Owning a vacation home has plenty of benefits too. You can deduct some of the costs associated with owning a vacation home, such as real estate taxes, personal property taxes, mortgage interest and points.