Homeowner Tax Tips to Take Advantage of Before Year-End

As the year draws to a close, Missouri homeowners have an opportunity to save money by taking advantage of tax benefits associated with homeownership. Here are some essential tips to help you maximize your tax savings before the year ends:

1. Pay January’s Mortgage Payment Early

If you’re itemizing your deductions, consider making your January mortgage payment in December. Doing so allows you to deduct the interest paid on that payment in this tax year, potentially increasing your tax savings.

2. Property Tax Deductions

Missouri homeowners can deduct property taxes paid during the year. If your property taxes are due in early 2025, paying them before December 31, 2024, could help you claim the deduction for this tax year. Check with your county assessor’s office for payment details.

3. Home Office Deduction

If you work from home and have a dedicated workspace, you may qualify for a home office deduction. This deduction includes a portion of your mortgage interest, property taxes, and utilities. Be sure your home office meets the IRS’s specific requirements for eligibility.

_{The standard deduction is $5 per square foot of home used for business (maximum 300 square feet). Check the IRS website for more details or with your accountant.}

4. Energy Efficiency Tax Credits

The federal government offers tax credits for homeowners who make energy-efficient improvements. Projects such as installing solar panels, upgrading insulation, or replacing old windows and doors with energy-efficient alternatives may qualify. Some improvements completed this year could provide a credit on your 2024 federal taxes.

5. Charitable Donations of Home Goods

Decluttering before the holidays? Donating furniture, appliances, or other home goods to a qualified charity can be deducted on your taxes. Be sure to request a receipt and document the fair market value of your items.

6. Refinancing and Points Deduction

If you refinanced your mortgage this year, you might be able to deduct points paid to secure the loan. Points are typically deductible over the life of the loan, but some may qualify for immediate deductions. Consult with your tax professional to determine eligibility.

7. Prepaying PMI or Homeowner’s Insurance

If you’re required to pay private mortgage insurance (PMI) or your homeowner’s insurance, prepaying these expenses before year-end could help increase your deductible expenses for 2024.

8. Missouri-Specific Property Tax Credit

Missouri offers a property tax credit for certain senior citizens and disabled individuals who meet specific income requirements. If eligible, you could claim up to $750 as a renter or $1,100 as a homeowner. Visit the Missouri Department of Revenue’s website for details and qualifications.

9. Track Home-Improvement Costs

While home improvement expenses aren’t deductible in the year they’re incurred, they can increase your home’s cost basis, reducing potential capital gains when you sell. Be sure to keep records of all major home improvements completed this year.

10. Consult a Tax Professional

Missouri’s tax laws and federal tax codes are complex, so consulting with a tax professional is highly recommended. They can help you navigate deductions and credits, ensuring you don’t miss any opportunities to save.

By taking proactive steps now, you can reduce your tax burden and set yourself up for a financially successful new year. Don’t wait until the last minute to explore these homeowner tax benefits—start now to maximize your savings! If you need recommendations for a tax professional, reach out to us.