If you have big plans this summer to sell or buy a home, donate some old items, or hit the casino, some of these activities may be able to be itemized as deductions. Here are some examples:
If you are refinancing your home this summer, you may be able to deduct a part of your mortgage interest. There are some limits to these deductions, though. According to the IRS, the deduction is limited to interest paid on a loan secured by the taxpayer’s main home or second home. When you refinance, you must use the loan to buy, build, or substantially improve your main home or second home.
If you are buying a new home this summer, you can deduct mortgage insurance if you pay on a total of $750,000 in qualifying debt for a first and second home or $375,000 when married filing separately.
The summer is a great time to go through your things and donate old clothes, furniture, or home goods you no longer need. Even better, these donations may qualify for a tax deduction if you itemize the deductions and show proof of the donations.
In addition to donating items, you may also be able to deduct mileage on your personal vehicle for services done for a qualified charity.
Lastly, if you enjoy hitting the casino, you may be able to itemize and deduct gambling losses up to the amount of gambling winnings.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
- IRS.gov, November 9, 2020