Many of us in Miami feel the sting of having most of our money in the equity of our home after the boom of the late 90s and early 2000s. Increases were slim after the market leveled out, and getting any of it entails selling our home.
And the consequence of having your lovely property be worth more, also involves your taxes being higher, as well. (Even though the State of Florida is currently working on a “reduction in tax increase.”)
But some wise words from one of the nation’s leading tax strategists and columnist, Diane Kennedy, in Realty Times, suggests using certain tax strategies to help homeowners “make money” sitting pretty in their homes.
Kennedy suggests renting your home and getting the tax break for a rental property even though it is still your principal residence. Report the rental on Schedule E, and deduct a portion of home-related expenses, such as power, water and mortgage interest, against rental income.
If you can’t rent out part of your home, create a home office. According to Kennedy, if legitimately own your own business and some portion of your home is used exclusively and regularly for your business, then by figuring out how much of your home is devoted to a home office, you can get the percentage to deduct from home-related expenses. Also, a depreciation deduction from the home office can save thousands on taxes.
These and other great “let your house work for you” ideas can be found in Kennedy’s "Ten HomeLoopholes to Get More Out of Your House.”
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