It’s the new year, and with that comes time to file taxes for 2022. While homeowners can benefit from deducting various expenses, many wonder: what can I deduct? While that answer depends on your individual finances and family situation, certainly you will want to weigh your options. Some people only take a standard deduction. However, if you own a home or a business, there are likely to be many expenses that exceed the standard deduction. It’s important to work with your real estate and accounting professionals to understand your options. As we head into peak tax season, Foundation Mortgage is here to help you understand deducting mortgage interest for your home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee.
Itemizing Your Deductions and Any Mortgage Interest
Before you opt to simply take a standard IRS allowed deduction on your taxes, it is important to itemize and review all eligible deduction expenses. If they exceed the standard amount, then you should consider writing them off. If you took out a loan to purchase your home, you can review if the interest on your mortgage can be deducted. This may apply to any borrowing you have done on the home, including home equity lines of credit or refinancing. Interest you pay on mortgages can be deducted up to $750,000, depending on the interest you pay and any insurance on the mortgage.
You will need to use caution and ensure that you understand the tax laws. There are restrictions on writing home expenses and mortgage interest off, particularly on rental properties and on second homes. For example, the home must be listed as collateral in your documentation. Other property cannot be listed. Remember that each state will also set rules on what can and cannot be deducted, in addition to the federal tax rules.
Other Deductions to Consider
Certain homeowners will also write off their property taxes. This depends on where they live and whether they’re filing joint or separately. In terms of the federal rules, singles can deduct up to $5,000 and married couples filing jointly can deduct up to $10,000. In addition, if you work on your business from home, there are many costs you can deduct for maintaining the business space. Just be certain to consult professionals on the rules and documentation standards. However, generally the more space you devote to the business, the more you can deduct.
With Foundation Mortgage, you will work with a trusted team of real estate professionals to find a great mortgage. If you have other questions on what you can deduct, feel free to reach out to our offices serving the Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee area.