4. Mortgage Interest Deduction
For the vast majority of homeowners, the best tax break comes from mortgage interest deduction. As a homeowner, you can actually deduct interest on up to $750,000 of your debt and $375,000 for married couples who choose to file individually. This type of deduction can be used for repairs, buying a new home, or building one.
In case you want to make some major home improvements, Uncle Sam can be quite generous if those improvements actually add value to your home. If you just purchased a home, please make sure that Form 1098 mentions the interest you paid. Even if the lender forgets to include it, you can still deduct it, but it’s easier for you as a new homeowner to have it on Form 1098.
