Tax Deductions for Renter If you rent an apartment or house, you probably wonder if you can get some type of tax break for your monthly rent payment. While you cannot deduct rent you paid while renting a home from your federal return, some states offer a deduction for this. Below we cover the renter’s deduction and other federal tax deductions you may be able to take. 1. Federal Deductions You May Be Able to Take Most renters are disappointed that they cannot deduct their rent payments from their federal income taxes. However, if you pay property taxes as part of your lease agreement, you can deduct that portion of your rent or any property tax you pay directly. You can also deduct property losses or cost of damage of your property from fire, theft, flood or other accidents or natural disasters, as long as you are not reimbursed for those losses by your insurance provider. 2. Business Use of Your Home If you work from home, expenses related to your business are deductible from your federal and state taxes. You can deduct the amount of rent represented by the portion of your home used for business, as well as a prorated portion of utility payments like water, power, heating and gas. Learn more about claiming the Home Office Tax deduction. 3. Renters Deduction While you cannot deduct rent you paid from your federal return, some states offer a deduction for this. Some states offer a renters tax credit, which usually represents an amount that, that particular state has determined to be the portion of the rent that the landlord collects in order to pay property taxes.
Posted on: Wed, 21 Aug 2013 18:23:39 +0000