Are you taking full advantage of tax benefits as a Florida homeowner?

Owning a home is expensive. Not only is the initial down payment needed, but all the maintenance, insurance, renovations, upgrades, mortgage and more need to be paid for.

Despite all these costs associated with ownership, there still are plenty of tax-saving opportunities residents should be taking advantage of to offset them.

Whether it’s state deductions, property tax benefits, or strategic planning opportunities, homeowners shouldn’t overlook these perks. Given the potential cost savings these opportunities offer, we’ve outlined the best tactics to apply so you too can save.

1. Deduct Mortgage Interest

For homeowners that itemize deductions on tax returns, consider adding a line for mortgage interest. Although it might seem tedious to calculate the interest paid throughout the year, it is often one of the largest tax breaks available.

This method is also particularly recommended for new homeowners, who typically have higher mortgage interest payments in those early years of ownership. But, regardless of how much was paid, this break is available to all Florida residents and should be looked at as a way to save money.

2. Apply the Homestead Exemption

Florida homeowners have the ability to apply the homestead exemption to their taxes. This means, if a property is a primary residence, it could be eligible to have up to a $50,000 reduction in its taxable value.

If it’s applied, it can significantly drop a person’s annual property tax bill for the year seeing as it would reduce its overall value.

Further, the Florida ‘Save Our Homes’ cap limits how much a property’s assessed value can increase each year which, in turn, further protects owners from tax increases.

3. Keep Records of Home Improvements

Many homeowners complete renovations or repairs on their home without keeping detailed records of them. But, these detailed records will come in handy when taxes are due seeing as certain improvements can be eligible for a break.

Things like new window installations, a roof replacement, HVAC upgrades, or a kitchen remodel could be used to reduce capital gains on the home. This tax would be applied to the home when sold which means documentation and receipts are critical to offset this potential cost.
4. Deduct Property Taxes

Although Florida does not charge state income tax, property tax may still be eligible for a deduction on federal returns, so long as it is itemized.

For those that intend on applying for this deduction, just be sure that you are claiming within the federal limit of state and local taxes (SALT). Otherwise, claiming over the amount and misunderstanding how much you are actually eligible for could result in a loss. 

5. Use Energy-Efficient Credits

There are certain federal tax breaks available for qualifying energy-efficient upgrades. These tax breaks are typically applied to upgrades such as the installation of solar panels, energy-efficient windows or doors, insulation, or certain HVAC systems.

To qualify, be sure to keep detailed records of the upgrades and cross-reference those with the federal list. If it qualifies, simply apply for the rebate directly on the next federal return for the immediate tax break.

Ultimately, homeownership is possible, especially with the right financial plan in place. If you’re a homeowner or are thinking of purchasing a home, consider speaking with a member of our staff today about the tax-saving opportunities that are available to you.

Give us a call at A.P. Accounting & Tax Services at 407-328-5001 today.

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