As any fellow tax-paying citizen, I’m always looking for ways to maximize my refund. While living in Chicago has it’s many perks, we are, unfortunately, one of the highest taxed states in the country. There are times when even working overtime is not worth it because the government will take that money. They like to go by this rule I like to call “the more you make, the more they take”.
It’s frustrating because those who work long hours do it because they have to. There are very few people who want to work overtime at a job they marginally like. 40% of American consumers have stated that they live paycheck to paycheck. Yet, the government has the audacity to take more than what their people are making.
This is why when tax season comes around, I search high and low for ways to maximize my refund. So you can understand now why I was excited to get this newsletter from Chris Peach, author of the Money Peach blog. He recently posted on his blog 48 ways to get a tax deduction!
Mortgage & Housing Deductions
1. Mortgage Insurance Premiums
You can deduct the PMI you paid on your mortgage, but only for policies from 2007 or later.
Mortgage Interest – deduct the interest on loans of $1 million or less (or $500k filing single)
2. Prepaid Mortgage Interest (Points)
You can deduct the prepaid interest you paid to purchase or build your home.
3. Property Taxes
The property taxes are based on the assessed value of your home, meaning the more your home is worth, the more you will have to pay. Fortunately, you can deduct your property tax amount on your federal tax return.
4. Interest on a Home Equity Line of Credit
If you are using the HELOC to improve your home or even purchase a home, the interest you will pay is tax deductible just as it is with a primary mortgage up to $1 million. If you choose to use the HELOC for something else, you can only deduct up to $100k and you can never deduct more than the home’s fair market value.
5. Sale of Your Home
If you sold your home in 2016 for a gain, you can exclude up to $500k for married ($250k single) of gains from your income.