Tax Benefits for Homeowners: Exploring Deductions and Credits in Florida » Brock CPA
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May 7, 2024

Tax Benefits for Homeowners: Exploring Deductions and Credits in Florida

While headlines may focus on rising interest rates and housing costs, homeownership in Florida remains a sound long-term investment. Owning a home offers stability, potential for appreciation, and a variety of tax benefits that can ease the financial burden. At Brock CPA, we’re here to help Florida homeowners navigate the ever-changing tax landscape and maximize their deductions and credits in 2024.

 

Why Homeownership Makes Sense in Florida

Despite recent market fluctuations, Florida’s housing market exhibits resilience. According to the Florida Realtors® https://www.floridarealtors.org/tools-research/reports/florida-market-reports, median sale prices are expected to remain steady in 2024, offering predictability for homebuyers. Additionally, Florida’s lack of state income tax makes it an attractive location for homeowners looking to keep more of their hard-earned money.

Owning a home also fosters a sense of community and allows you to personalize your living space. Long-term, homeownership can contribute to financial security as the property value potentially appreciates, building wealth over time.

 

Tax Advantages of Homeownership in Florida

Florida homeowners hold a distinct advantage: the Homestead Exemption. This exemption significantly reduces the taxable value of your primary residence, translating to lower property taxes. According to the Florida Department of Revenue https://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx, the exemption can be as high as $50,000, offering substantial savings.

 

Federal Tax Deductions for Homeowners

Beyond the state level, homeowners across the U.S. can benefit from various federal tax deductions in 2024:

  • Mortgage Interest Deduction: A portion of the interest paid on your mortgage loan can be deducted from your taxable income. The Tax Cuts and Jobs Act of 2017 limits this deduction to the interest paid on mortgages up to $750,000 for new loans issued after December 15th, 2017, and $1,000,000 for loans issued before that date https://www.irs.gov/forms-pubs/about-publication-936.
  • Mortgage Points Deduction: Points, which are upfront fees paid to secure a lower interest rate, can be deducted in the year they are paid if certain criteria are met https://www.irs.gov/forms-pubs/about-publication-936.
  • Private Mortgage Insurance (PMI) Deduction: If you have a conventional loan with a loan-to-value ratio exceeding 80%, you may be able to deduct the PMI premiums you pay on your federal tax return https://www.irs.gov/forms-pubs/about-publication-936.

 

Important Note: Tax laws can be complex, and eligibility for deductions can change. It’s crucial to consult with a qualified tax professional at Brock CPA to determine which deductions apply to your specific situation.

Tax Credits Available to Florida Homeowners

While deductions lower your taxable income, tax credits directly reduce the amount of tax you owe. Here are some more potential tax credits for Florida homeowners in 2024:

  • Residential Property Insurance Premium Tax Credit (New in 2024!): Florida recently passed a bill offering a one-year tax credit for the cost of residential property insurance premiums https://www.flsenate.gov/Media/PressRelease/Show/4541. This credit applies to policies written between October 1, 2024, and September 30, 2025. Be sure to stay updated on the official application process for this new credit.
  • Energy Efficiency Tax Credits: The federal government offers tax credits for homeowners who install energy-efficient improvements in their homes. These credits can help offset the cost of upgrades like new insulation, high-efficiency windows, or solar panels https://www.energystar.gov/about/federal-tax-credits.

 

Additional Considerations for Florida Homeowners

  • Save Your Receipts: Keeping detailed records of homeownership expenses like mortgage interest, property taxes, and home improvement costs is crucial for claiming deductions and credits.
  • Consult a Tax Professional: Tax laws can be intricate, and Brock CPA’s experienced team can help you maximize your deductions and credits while ensuring compliance with federal and state regulations.

 

Owning a home in Florida is a significant financial decision. However, with its long-term value proposition, potential for appreciation, and various tax benefits, it can be a rewarding investment. By understanding and utilizing the available deductions and credits, you can significantly reduce your tax burden and make homeownership in Florida even more advantageous. Contact Brock CPA today to schedule a consultation and ensure you’re taking full advantage of all the tax benefits available to you.

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