Being a Metro DC homeowner does have its perks— from additional storage that renters just don’t have to the tax benefits associated with your home. However, many residents in Washington DC, Bethesda, Chevy Chase, and Northern Virginia are not aware of certain deductions available to them and as a result, skip them entirely.
If you have not yet filed your tax return, there is still time to look over the following list of home-related deductions you are able to claim.
The mortgage interest deduction
Metro DC homeowners are able to deduct their mortgage interest, which you claim on Schedule A of your tax return. Interest paid on a mortgage of up to $1 million, or $500,000 if you are married filing separately, is deductible when you use the loan to buy a home, build a home or improve a home.
If you have a second mortgage, home equity line of credit or home equity loan, and use the loan to buy, build or improve a second home, that amount does count toward the $1 million limit. It is also important to keep in mind that any other loan secured by your home for other purposes, like your child’s college tuition, does still qualify for the mortgage interest deduction (up to $100,000 for single filers or $50,000 for married filing separately) as your home secures the loan.
The property tax deduction
Homeowners in Washington DC, Bethesda, Chevy Chase, and Northern Virginia are able to deduct real estate property taxes on Schedule A. The amount you paid in property taxes will show on your annual escrow statement if you have a mortgage with an escrow account.
The private mortgage insurance deduction
If you were required to take out private mortgage insurance (PMI) on your home loan, you can deduct the cost on Schedule A if you itemize your return and your income is less than $100,000 (or $50,000 if married filing separately). This also only applies to loans taken out in 2007 or later.
The energy-efficient upgrades deduction
Installing new energy-efficient features—like windows and appliances—in your home does allow you to claim a specific tax credit. The credit does have a lifetime cap of $500, so you will need to subtract any energy-efficency tax credits you claimed in previous years from this limit.
Ready to become a homeowner for the first-time this year? Or simply looking to move to your next dream home in Metro DC?
Give The Estridge Group a call today!