Tax laws and regulations pertaining to deductions can be quite confusing. While you may be familiar with standard rules such as the interest on a home mortgage, there are numerous other hidden tax deductions that can help save you money and fatten your refund from the IRS. Here are are several hidden tax deductions that may surprise you and help you save money.
Hidden Tax Deductions That May Surprise You
Refinancing
The home-buying process can be exciting. Unfortunately, closing costs and the down payment can quickly add up. An added benefit to purchasing a home is that you’re able to deduct the interest paid on your mortgage each year. With interest rates still at an all-time low, many homeowners are taking advantage of the low costs by refinancing their current mortgage. A hidden advantage that can aid you on your taxes is that you’ll be able to deduct refinancing points that you’ve paid.
Home Renovations
If you own a small business, you realize the importance of financial planning and using private capital to grow your company. As your bank account grows with your business success, you’ll be able to save money for a down payment on a home.
If you purchase a home that needs a little work, you can make your renovations work for you. In addition to helping you save money on your utility bills, energy efficient appliances and materials are tax deductible. From appliances and wall insulation to new water heaters and wind turbines, the credits can be pretty substantial.