If you have recently purchased a second home or are looking into buying a second home, you’ll need to know how owning to homes impacts your taxes. Specifically, you’ll want to know whether or not you can claim two primary residences on your taxes.
The short answer is that you cannot have two primary residences. You will need to figure out which of your homes will be considered your primary residence and file your taxes accordingly.
IRS and Primary Residence
There are a few different ways to figure if the home you’re currently living in can be considered your primary residence. In order to determine which home should be considered your primary residence, you need to ask yourself the following questions:
- Where do you receive the bulk of your mail?
- What address is listed on your driver’s license?
- Which home is in closer proximity of your employer?
- What address is listed on your tax returns?
- Where are your cars registered?
- Where do the bulk of your family members live?
After you have answered these questions, you should have a better idea of where your primary residence is. While the IRS does not allow you to have two primary residences for tax purposes, you may still be eligible for tax deductions when you own multiple homes.
Tax Benefits of Multiple Residences
While you may not be able to claim multiple primary residences for tax purposes, the IRS does give you tax deductions if you own multiple homes. As long as both homes are being used for personal purposes, you can deduct the mortgage interest, home equity, loan interest, and insurance premium payments you pay on your second home. In order to maximize your tax deductions, you need to speak to a tax professional.
Tax Deductions for Moving Expenses
Moving expenses can be tax deductible under the right circumstances. The IRS lists criteria related to when you start work, how far your new residence is from your job verses how far your old residence is from your job, and how long you have been employed since moving. We highly recommend speaking with a tax professional prior to buying a second home to fully understand how this impacts your eligibility to deduct moving expenses from your taxes.
For more information regarding moving, packing, and everything in-between, contact the moving professionals at Bekins Moving Solutions today. Call (877) 594-1187 to get your free moving quote today.