Did You Get All Your 2019 Home Tax Deductions?

In the wake of all the changes ushered in by the new tax plan, the Tax Cuts and Jobs Act, realtor.com offers a list of all the tax breaks for homeowners.

Mortgage interest


In the past, you could deduct the interest from up to $1 million in mortgage debt (or $500,000 if you filed singly). But for loans taken out from Dec. 15, 2017, onward, only the interest on the first $750,000 of mortgage debt is deductible. Mortgages are structured so that you start off paying more interest than principal.

For example, in the first year of a $300,000, 30-year loan at a fixed 4 percent interest rate, you’d be deducting $10,920. Note: Taking this deduction under the new tax law does require itemizing deductions, but it may be worth the trouble, especially for new homeowners.

Mortgage points


If you bought a home and paid points, then you can still deduct those from your taxes. They must be “true,” or discount, points, rather than origination points.

After all, points are essentially mortgage interest that you prepay, so it makes sense that they’d be treated like the rest of your mortgage interest. Each point is 1 percent of the loan amount, so if you paid 2 points on a $300,000 loan, you can deduct $6,000.


Private mortgage insurance


If you can’t make a 20 percent down payment on your home, most lenders require that you pay private mortgage insurance or PMI. The upside: It’s tax-deductible, as long as your adjusted gross income is less than $100,000.

(For each $1,000 you make after that, you can deduct 10 percent less of your PMI, up to $109,000.) PMI is generally between 0.3 percent and 1.5 percent of the loan amount annually, so on a $300,000 loan, you’d be deducting between and $900 and $4,500.

Home equity debt interest


Homeowners often take out a home equity loan or home equity line of credit to tap into some quick cash—for college, weddings, home improvements or otherwise—using their home as collateral. And up until 2017, homeowners could deduct the interest on home equity debts up to $100,000 for married joint filers.

Now home equity debt interest deductions have been eliminated unless you spend the money on home improvements. And unlike mortgage interest deductions, the new rules on home equity debt apply to all loans regardless of when they were taken.

To reap the benefit, your total debt—meaning your mortgage, plus your home equity loan—can’t be more than the new $750,000 cap.

Property taxes


This tax season, there’s a $10,000 cap on the combined amount of your property taxes, state and local income taxes, and (for states without income tax) deductible sales tax.

One bright side for landlords and those with vacation homes: You can take deductions for all the properties you own, plus add your state income tax.


Energy-efficient upgrades


Did you add solar panels or a solar-powered water heater last year? That means you can help yourself to a tax credit. Qualifying solar electric panels and solar water heaters are good for a credit of 30 percent, plus the cost of the equipment and installation. For a $30,000 green investment, that’s a cool $9,000 back.

To qualify, the solar panels have to generate at least half of the energy used by the home, they have to be installed in your primary residence, and they can’t be used to heat a pool or hot tub.

The credit will remain 30 percent of the cost for equipment installed between now until the end of 2019, 26 percent until the end of 2020 and 22 percent until the end of 2021.

Home office deduction


The home office tax deduction disappeared for all W-2 employees who have an office elsewhere that they could use if they wanted to. The only people who can continue taking this deduction are those who truly run their own business from home.

Using the simplified home office deduction, self-employed people can take $5 for every square foot of office space, up to a maximum of 300 square feet. For a 200-square-foot home office, you’re looking at a nice $1,000 deduction. It must be a dedicated home office, used only for work

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