We know, we know. You raced to the post office just in time to meet the deadline to send your tax forms to the IRS, bemoaning those receipts you just couldn’t find anywhere and cursing your procrastination which led to the last-minute crush again. So while you still have taxes on your mind, why not prepare ahead so you’re sitting pretty by the time you file in 2018? Here’s a roundup of homeowner tax breaks you should prep now, so you can take full advantage of them next year and avoid the last-minute scramble.
1. Set up your home office
If you’re working on a La-Z-Boy in the living room, it might be time to clear out the guest room and assemble that Ikea desk. That way, you can take the home office tax deduction in 2017. The “simple method” allows you to take $5 per square foot for a total of $1,500. You could also go for a more complicated deduction: a percentage of your home’s electric bills and other expenses.
Keep in mind that you have to use the room “regularly and exclusively” for business, says Dave Du Val, a tax expert and chief customer advocacy officer at TaxAudit.com. If you’re an employee, the office must be for the convenience of the employer (e.g., you’re a salesperson in New York for a company whose only office is in California). Last but not least, you’ll need to tabulate your expenses as you make them in 2017, so keep a logbook and save those receipts.
2. Consider a HELOC for home improvements
Is 2017 the year you want to finally do that kitchen remodel or bathroom addition, but money still feels too tight? Then you might want to consider taking out a home equity line of credit, or HELOC. The interest on a loan up to $100,000 is tax-deductible, says Du Val. That means those upgrades just got a whole lot cheaper.
3. Install solar panels
Alas, the clock ran out on most tax credits available to homeowners who went green at the end of 2016. However, there is one remaining energy-efficiency credit still available to homeowners: solar energy.
“You can take a credit of up to 30%, with no cap, on the equipment and installation costs of solar energy panels and solar water heaters you purchase in 2017,” says Jacob Dayan, partner, and co-founder of CommunityTax.com.