Tax Credits to Claim in 2015!
Tax Credits and Deductions to take advantage of in 2015!
You don’t have to wait until the last minute to find out which of these tax credits you should be claiming. If you are not getting credits, contact your professional accountant and ask them to help you through an eligibility test. For those who get credits but have always struggled with renewal, your accountant can also assist in getting renewal help. You may be eligible for more than you think this year! Below are some of the common tax credits available for Homeowners!
Did you know that you may be eligible for tax incentives and deductions worth $1,500 a year or more? If you haven’t been claiming these credits, 2015 is the year to finally get a break on your taxes. With that said what are some of the tax credits your home may be able to get you in 2015?
For most, interest rates contribute to a good portion of the money owed on a home each month. Luckily, unless your loan is over $1 million your interest is deductible. This even applies second mortgages, and even second homes. There are, however, rules that apply to second homes, including the number of days spent there, and how much of the year the second property is rented. It is important to have someone with an accounting background and education to find the correct tax credits.
Deductions for Private Mortgage Insurance (PMI)
Anyone who buys a house with less than 20 percent down has to pay private mortgage insurance. The ability to deduct PMI for mortgages taken out on primary residences in 2007 or later was extended one more year for homeowners who meet income limits. This means that not only do you get to deduct the interest you’re paying, but also the Private Mortgage Insurance. That could mean a fairly large write-off for many homeowners!
No tax for canceled debt on a primary residence.
Before the Mortgage Forgiveness Debt Relief Act of 2007, Americans who lost their homes to foreclosure or did a short sale owed tax on the forgiven debt. That means if you owed $250,000 on your house, and it was sold in a short sale or foreclosure sale for $125,000, you would owe regular income tax on the difference. That’s a hefty sum for someone who couldn’t pay the mortgage in the first place! The tax relief had been extended through the end of this year, meaning that debt forgiven on a mortgage for a primary residence (up to $2 million) is not taxed.
Home energy efficiency improvements
Homeowners have long been unaware of tax credits on energy efficient improvements. In 2015, if you’re going to make any home improvements, go with energy efficient options. According to the Department of Energy, you can claim up to 30% of the cost up to $1,500 on all energy efficient items including; insulation, energy-efficient doors and windows, and heating and cooling equipment.
Residential renewable energy tax credits
Any efforts geared towards increasing energy efficiency will always be rewarded. That means you can now claim tax credits on all renewable energy additions made to the home. According to the Energy Department, you can get credits on all solar energy systems (including solar electric systems and solar water heaters), geothermal heat pumps, small wind systems, and residential fuel cell systems. Homeowners are eligible for tax credits of up to 30% on any of these improvements.
Deduction of sales tax in states with no income tax.
State income tax is deductible on your federal tax return. The bill has been extended for one year for those in states without income tax: Florida, Texas, Washington, Wyoming, Alaska, Nevada and South Dakota. This is also useful to some taxpayers in states with low income tax. While you could save receipts and deduct the exact amount, that will only pay off in a year you make big purchases, such as a car or boat. The IRS has a formula for the allowable deduction based on your residence and adjusted gross income.
Relocation for work
Yes, you are also eligible for tax credits if you’re moving from one place to another for job-related reasons. Whether it’s your first job, or you’re transferring under the same employer, if you’ve moved to a new home for work then you may qualify for tax credits. However, you’ll need to validate that your move passes a series of conditions. For example, the distance between your old location and the new place should be at least 50 miles.
Profit from selling a home
Before 1997 in order to avoid being taxed on the profit of selling your home you needed to buy another home with the money gained in the sale. In 1997 laws were changed to allow $250,000 in tax free sales gain and $500,000 for married couples filing jointly. There are many conditions to this tax break that are to be considered before selling your home, such as the amount of time you have lived there or whether you meet any of the unforeseen circumstances if you don’t meet the residency requirements.
Sources: http://deckerrepairs.realtytimes.com/marketoutlook/item/32918-5-tax-credits-to-bring-home-in-2015 http://money.usnews.com/money/personal-finance/articles/2015/01/09/7-recently-extended-tax-breaks-that-will-save-taxpayers-money