Tax credits for homeowners
The NCAA tournament isn't the only madness going around the country. Many homeowners are rushing to file their taxes before the deadline, going through bundles of paperwork to see if they can find any tax breaks that might pad their wallet. Here are a few tax tips homeowners should consider:
Make your home go green
Homeowners intent on conserving energy and going green won't just save money on their utility bills. Those who made investments in energy-efficient products or solar energy systems might be entitled to a residential energy credit, according to The Wall Street Journal.
Mary Canning, a retired dean of Golden Gate University's School of Taxation and Accounting, told the Journal there are varying caps for different energy saving installations. Some homeowners might get back $200 for installing energy-efficient windows, while others could see an additional $500 for upgrading their home's insulation.
Some top-notch energy renovations can even net homeowners 30 percent of the project's cost, which includes the installation of solar panels, geothermal heating pumps, residential wind systems or solar hot-water systems. Canning added eco-friendly updates are especially popular in California. Many homeowners in The Golden State are renovating existing energy systems even if they plan to sell their homes.
"People are more and more looking at this being the place where they are going to retire and putting in solar," she said.
Trulia reported homeowners who install double-paned windows or put up a new roof can deduct 10 percent of the cost up to $500.
Home office deductions
Homeowners who work from home might be eligible to receive tax credits for a home-office deduction. While The Wall Street Journal reported the IRS pays special attention to home-office deductions, those who legitimately work from home can earn some major cash back.
"If someone is claiming 42 percent of their home as a home office, stuff like that is an audit trigger," Eric Green, an attorney who specializes in taxes, told the Journal.
Trulia recommended asking yourself a few questions before filing for a home office deduction: Does your home office serve as the central location where you conduct business? Do you have a specific area of your home delegated as a home office?
If so, then you should be in luck. Trulia said you can deduct $5 per square foot of designated office space up to 300 square feet, which means you can deduct up to $1,500 for your home office.
Johanna Fox Turner, a certified financial planner from Kentucky, told NerdWallet a homeowner doesn't need a designated office in his or her home to seize the tax credit benefits.
"An extra bedroom works, as long as you don't use it for guests, even a few days a year," Fox Turner said. "You can also use a portion of a room as long as it is clearly delineated, such as a den divided between personal use and home office, divided by a bookcase."
However, Tim Gagnon, a finance professor at Northeastern University, told NerdWallet it gets a bit more complicated if the home office isn't assigned to a single room.
"The simplified method works well for single-room offices and small operations," Gagnon said. "But if the business spreads throughout the house, or is a large part of the house, the 'actual expenses' method will probably obtain more deduction … it could be worth the effort of gathering, analyzing and separating business use from personal."
Home upgrades related to health
Homeowners who have recently experienced a turn for the worse with their health are also eligible for tax credits. Those who have installed entrance ramps or adjusted doorways to accommodate wheelchairs are eligible, according to Trulia. This could include adding a stairway lift or even a therapeutic hot tub.
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