American Tax Service

Helping Americans File Their Taxes

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Which Home Improvements Qualify for Residential Energy Credits?

Upgrading your home to make it more energy-efficient doesn’t just help the environment. It also helps your wallet through reducing your energy costs, increasing your property’s value, and giving you money back in the form of residential energy tax credits for home improvements.

Help is at hand because you can take care of some of those upfront costs with the help of tax breaks on specific home improvement projects. Here’s what you need to know to claim the residential energy tax credit.Read the rest

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Which Home Improvements are Tax Deductible?

home owner tax deductionsAre you looking to renovate your home? Usually, you can’t expect to deduct anything from your Federal tax return just because you decided to make changes to your home.

But certain home-improvements are tax deductible and can be utilized to reduce the amount of tax you pay to Uncle Sam.

There are both tax credits and deductions that can be taken when the purchase was made or afterwards. Let’s look at them.

Use Your Mortgage to Improve Your Home

mortgage interest tax deduction

If you’re buying a home, then you can reduce the costs of your renovation project by making the changes when you purchase the home.… Read the rest

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What is the Correct Home Sale Exclusion Amount for Married Couple?

home sold

As a married couple, you can get around some profit from being taxed. It won’t be for the full amount that typical joint filers file of $500,000, which is based on one spouse’s eligibility for capital gains home sale exclusion.

The profit or gain of the home sale will determine whether you owe or not. You can even sell your home for millions and not owe a dime to the IRS if your profit wasn’t more than the allowable amount. If all the gain is avoidable, you will not owe.… Read the rest

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Home Energy Tax Credits

Tax season is going to be here before you know it. Therefore, now is the time to make sure that you have made all of the energy-efficient upgrades to your home.

By having an energy efficient home, you will save money on your bills and pay less money in taxes. Learn how you claim home energy tax credits if you qualify.

Non-Business Energy Property Credit

home energy tax creditsYou can get a 10% credit for your energy efficient improvements. Things that fall under this category include:

  • Water heaters
  • Electric heat pumps
  • Central air conditioners
  • Natural gas, propane, or oil water heaters
  • Qualified oil furnaces
  • Qualified oil hot water boilers
  • Some air circulating fans
  • Insulation that reduced heat loss or gains
  • Exterior windows, skylights or doors
  • Storm windows and doors
  • Solar panels
  • Metal and asphalt roofs that reduce heat loss or gain

Residential Energy Efficient Property Credit

This energy tax credit will allow you to have a 30% credit for the alternative energy equipment that you have had installed.… Read the rest

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What is Capital Gains Tax on Your Home Sale?

What is the capital gains tax rate on homes and real estate?Are you wondering if you’ll have to pay capital gains tax on your home sale?

What many people do not know is that a large portion of homeowners who sell their homes can avoid capital gains tax on their home sale.

How Much is Capital Gains Tax on the Sale of a Home?

When selling your primary home, you can make up to $250,000 in profit or double that if you are married, and you won’t owe anything for capital gains.… Read the rest

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What is Capital Gains Partial Exclusion for Home Sale?

There are some instances where you may not meet all the tests, but you would be eligible for a partial tax break. If you sell your home due to special or unforeseen circumstances, your tax preparer can talk to you about a capital gains partial exclusion for home sale. These instances would be such as unemployment or a change in your health.

Capital Gains Partial Exclusion for Home Sale

This figure is calculated as a fraction of the time that you would have met the two-year test. Let’s say you lost your job and sold your home after only being in it a year and three months.… Read the rest

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Tax Credits for New Home Construction

Are you building a new home?

There are tax breaks available for people in this situation. They come in the form of tax deductions and tax credits. A credit is used to reduce the amount you pay, and a deduction reduces your total taxable income.

Here are some of the tax write-offs available to you now.

Did You Pay Interest on a Construction Loan?

new home construction

If you took out a construction loan to build your home, then chances are you paid interest on that loan.… Read the rest

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Home Equity Loan Tax Deduction

Is it possible to get a tax deduction on your home equity loan?home equity

Interest on home equity loans has traditionally been fully tax-deductible. But with the tax reform brought on by President Trump’s Tax Cuts and Jobs Act (TCJA), a lot of homeowners are struggling to work out whether they can still take a home equity loan tax deduction.

The answer is you can still deduct home equity loan interest. But the rules have changed, and there are more limitations than ever before.… Read the rest

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What is the Home Office Deduction?

In order to claim the home office deduction, you must know the square footage of your entire home and your home office. Auditors do not usually make home visits. If you send them photos of your home office, that is usually all of the verification that they need.

Determine Which Method to UseHome Office Tax Deduction

Percentage of your home – This method allows you to calculate your home office percentage and then claim the home office deduction. You need to determine the square footage of your entire home and the square footage of your office.… Read the rest