Recent trends in the Pittsburgh real estate market have been quite favorable for homeowners. With housing prices appreciating in the last quarter around 4.73%, that translates into an annual appreciation rate of 20.32%. So for anybody looking to sell a house this year, that means the potential for a sizable profit is right around the corner.

Even for those Steel City homeowners whose moving plans might be in the distant future, there’s always the question of how to improve the tax burden. Rocket Mortgage recently compiled a list of 8 Tax Deductions that homeowners should know about when tax time kicks into full gear, or at least before the end of December.

The first question homeowners need to decide is whether to take a Standard or an Itemized Deduction. This is an amount that you can subtract from your total annual income before taxes. Here are the specific amounts to keep in mind:

·      For single and married people filing taxes separately, the standard deduction is $12,550.

·      For married couples filing jointly, the standard deduction is $25,100.

·      For heads of households, the standard deduction is $18,800.

If you total your homeowner deductions and it’s less than the standard deduction, then using that amount makes the most sense. However, if your tax deductions are more than that amount, then it would be smart to use an itemized deduction. Some categories of expenses one can deduct include un-reimbursed medical expenses, long-term care insurance premiums, home mortgage and home equity loan interest, and charitable contributions.

Along those lines, it’s also critical to recognize that some home expenses are not tax-deductible. These include:

·      Down payment on the residence

·      Principal loan payment on a mortgage

·      Utilities such as gas, electric, and water

·      Fire insurance

·      Homeowner’s insurance

With that in mind, here are 8 tax breaks for homeowners to watch for:

1.    Mortgage interest. (Up to $750,000 if you file as a single or a married couple, filing jointly, or half that if you’re married and filing separately)

2.    Interest for Home Equity Loans. This is a second mortgage on your house, and only deductible if you used the borrowed funds to help finance a home improvement. (This was changed by law in 2017. Previously, it didn’t matter how you spent those funds.)

3.    Discount points. These are paid to help reduce the overall cost of a loan. One point is equal to 1% of the loan.

4.    Property taxes — up to $10,000 if you’re married, filing jointly, or $5,000 if you file separately or you’re single.

5.    Necessary home improvements. The key word is “necessary” as it doesn’t include all home renovations.)

6.    Home office expenses. Applicable if you run a business from your home. The size of the expenses equates to the percentage of your home that is the place of business.

7.    Mortgage insurance. Private mortgage insurance is typically paid when you have less than 20% of the loan as the down payment.

8.    Capital gains. This tax break applies when you sell your home for a profit, so long as the home was the primary residence for two of the past five years.

When there are thousands of dollars at stake, it’s key to add up your tax breaks and fully explore your deductions as a homeowner. Naturally if you have specific questions, consult a tax or real estate professional to address all of your concerns.

For suggestions and practical ideas to help you maximize success on your moving day, call us at 1-800-810-2635. At George Moving & Storage, we have over 40 years of experience as Pittsburgh movers who also serve eastern Ohio and northern West Virginia, not to mention full-service relocations throughout the United States. Contact us today to learn more or for a free quote.