Now that this tax season is over…I have some tips for homeowners on what they can prepare for in terms of great tax breaks over the coming year. After all, one of the greatest benefits to owning a home is in the tax breaks that are available to you as the homeowner. So, while we have taxes on our minds, let’s prepare for next year to make sure we take full advantage of those fabulous tax breaks!
Let's start by setting up a home office! If you work out of your home, the so-called “simple method” allows you to take $5 for every square foot of home office, for a total of $1500! You can go a more complicated route, using a percentage of your utility bills used for that room… just start somewhere! Keep in mind, you need to use the room regularly and exclusively for your business! So consider moving your work-space from your kitchen table to a spare bedroom and creating a home office in order to take advantage of that break! When asked, you'll have to compute the square footage of that home office and see what percentage it is of your total home's square footage. From there, a tax professional will help you determine what, if any, deduction you qualify for.
If you're like me, you've likely seen solar panels popping up on homes all around Albuquerque. The solar industry has really been targeting homeowners and a popular question among consumers is whether or not you can deduct the installation of the panels when it comes to taxes. Unfortunately at the end of 2016, the clock ran out on MOST tax credits available to homeowners who “went green” … However, the good news is the one remaining energy efficiency credit that is available to homeowners is for Solar Energy! Tax experts say you can take a credit of up to 30%, with no cap, on the equipment and installation costs for solar panels and solar water heaters that you purchase this coming year! To qualify, the equipment must be used to generate power or heat water in your primary or secondary home. So if you're on the fence about going solar, right now just might be a great time to do it, just don't forget to keep all of your receipts!
