The recent change in the housing market has opened up opportunities for deals. New home buyers have found fantastic deals on their properties. Thousands are already enjoying the perks of their new home ownership. Even though you probably are aware that purchasing a property is a good investment, you may not be aware of the many tax incentives associated with such ownership. Avoid difficult tax situations and determine in advance which deductions are available to you. Here are some of the most common deductions you may qualify for:

Interest on your mortgage payment. The interest accumulated on your home loan is tax-deductible. This is the case for interest on up to $1 million in mortgage debt.

Interest on home improvements. If the improvements you make to your home add to the value of your home, they can be tax deductible. This does not apply to maintenance or repairs. Work that is purely cosmetic doesn’t apply.

Taxes paid on real estate are tax deductible.

Home office deductions. If you work out of your home, you can deduct some of the costs associated with that part of your house. This includes utility payments and part of your insurance.

Moving costs. If you move more than 50 miles for a job, you can deduct costs incurred. These costs include transportation and storage expenses.

Energy efficient upgrades to your home. If you make changes that are intended to make your property more energy efficient, you can cash in on many tax credits. These credits have limits and require you to prove that you purchased certified materials. You can check with the manufacturer to see if your purchase is eligible for tax cuts.

Selling costs. If you decide to sell your property, you may deduct some costs incurred within 90 days of the sale. These can include things such as carpet cleaning and painting.

Understanding and educating yourself on the deductions available to you can reduce your liability with the Internal Revenue Service. If you’re a first time buyer or new home owner and are interested in tax cuts associated with your investment, consult with a professional tax specialist. Understanding these deductions can help you file the appropriate documents with your taxes. Doing so will prevent tax problems and alerting the IRS to a mistake that can cause you to be audited.

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