Tax season is here, and many renters are left wondering what deductions they can claim on their tax returns. Fortunately, several tax benefits available to renters can help them save money. Here are some top tax tips for renters:
Determine if You Can Deduct Property Taxes
If you pay property taxes as part of your rent, you can deduct a portion of those taxes on your tax return. You can use your rental agreement and receipts to determine the portion of your rent that goes toward property taxes. According to the Tax Foundation, the average American homeowner paid $3,296 in property taxes in 2020.
To learn more about this deduction, visit the IRS website.
Deduct Home Office Space
If you work from home and use a portion of your rental space as a home office, you can deduct a portion of your rent as a business expense. The IRS allows a deduction of $5 per square foot of home office space up to a maximum of 300 square feet. Keep records of your rent payments and calculate the portion of your rent that goes toward your home office space.
Claim Moving Expenses
If you move to a new home because of a job change, you can deduct your moving expenses on your tax return. According to the IRS, you can deduct the cost of moving your household goods, personal effects, and travel expenses incurred while moving. Keep receipts and records of your moving expenses to claim this deduction.
Consult a Tax Professional
Taxes can be complex, and it’s always a good idea to consult a tax professional for personalized advice on your tax situation. They can help you navigate the intricacies of the tax code and identify any additional deductions you may be eligible for.
By taking advantage of these tax tips, renters can save on their tax returns and keep more money in their pockets. Don’t forget to consult a tax professional for personalized advice on your tax situation.
Tax Foundation: https://taxfoundation.org/
IRS website: https://www.irs.gov/