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Tax Breaks You May Not Have Known About



Little Known Tax CutsTrying to cut back on how much you spend can sometimes be a tricky situation to figure out, especially if you are trying to read the tax code!  In some occasions, it may seem that the only option is to move to a new area in order to lower the cost of living and maximize your tax returns. 

Overlooking these common home-related tax breaks is easy to do, but you're guaranteed to love every one of them.

Mortgage interest tax break
Mortgage interest tax deduction, which is the ability to write off interest on up to $1 million of mortgage debt, makes buying a home more compelling than renting one. 

A study conducted by the American Institute for Economics Research states that just about 63% of homeowners itemize deductions which must be done in order to take advantage of the mortgage interest deduction and property tax deduction. 

In some instances, the income tax liability is too low making itemizing tax deductions impractical. 

Charity
You can deduct the items you donate to charity as well as the money, but did you know that you can also deduct the cost of any supplies you buy specifically for a charity? It is considered an itemized charitable donation.

Moving expenses
The IRS allows you to write off any moving expenses when it comes to relocating for a job, even if it is your first job. It can be found in the "adjustments to income" section at the bottom of your 1040 form.

Green home improvements
Improving your homes energy efficiency can supply you with tax breaks, both federal and state. Sure, federal tax deductions are easy to be aware of, but the energy efficiency of your home can account for up to 15% of your annual income. These improvements are eligible for either state, county and/or city tax credit.

Job-hunting cost
Yes, you can deduct the cost associated with looking for a job such as fees for resume preparation as well as employment of outplacement agencies if you itemize your expenses. There is a negative to this deduction; these costs must exceed 2% of your adjusted gross income before they produce any tax savings.

Education
Internal Revenue Code offers a number of tax-saving options for those who want to further their education. In fact, the tuition and fees deduction can help take off up to $4,000 off taxable income, and you don't even have to itemize!

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