7 things you need to know about getting homeowner’s tax breaks in 2020

Your tax return may be a high point in your year, especially if you became a homeowner before 2020.

According to the CPA Practice Advisor, the average worker might see up to $2,000 in tax savings. *This number could increase if you own a home and have dependents or children.

Your homeowner’s tax guide for 2020: 5 big breaks and 2 more benefits

The IRS starts accepting 2019 tax returns as of January 2020. While the new tax credits introduced in

2019 made filing overwhelming for many, this year’s looking a lot smoother. Very few, if any, dramatic

changes have been made.

Accounting for annual inflation, tax brackets, as well as the standard deduction, have risen for 2020:

Here’s where you can find the standard deduction/brackets for the taxable year of 2019. The recently

reformed tax law lets consumers keep more money. Lower tax rates and a higher standard deduction

make this possible.

With a higher standard deduction, there may be fewer taxpayers who itemize (list out expenses that can

be subtracted from annual taxes). If you don’t have much to itemize, taking the standard deduction

exempts two times as much of your earnings.

But if you own a home, you could use some or all of these tax breaks to see more savings:

1.) Home equity loan/HELOC interest.

• Now you can only deduct home equity interest that’s been used for renovations — a significant change from years past.
• If you are eligible to deduct HELOC interest for renovations, that amount will go toward your total deduction limit of $750,000 in mortgage interest. (See below.)
• This kind of loan may be labeled as a home equity line of credit (HELOC), home equity loan, or second mortgage.

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