First-time homebuyers will have many different responsibilities that come with owning a property rather than just renting one. From year-round yard maintenance to calling a plumber yourself, homeownership can seem much more expensive than you were expecting, especially in the first year. While 78% of recent homebuyers thought that their real estate agent was a very useful source of information regarding these types of expenses, many first-time homeowners still aren’t aware of a great financial perk. As a homeowner, you can receive certain tax breaks that renters can never claim.

Before you file your taxes for this year, you should get the help of an experienced tax professional. They will help ensure that you take advantage of all the breaks available to you. As we still have a few months before it’s time to file, however, you’ll want to start collecting certain data and receipts as soon as you can. Let’s take a look at five tax benefits all first-time homeowners should know about before they file their taxes.

1. Mortgage Interest Deduction

Typically, the most significant tax break you’ll see after buying a home is the mortgage interest deduction. This deduction covers the interest you pay on up to $1 million worth of loans. As borrowers with new mortgages tend to pay more interest, this deduction is especially helpful for new homeowners.

To claim the mortgage interest payment deduction, you will need to file an itemized tax return. You should receive a Form 1040, which outlines the interest you’ve paid for that year, from your loan provider shortly after the tax year ends. Be sure to keep an eye out for this form. If you’ve already learned that 35% of Americans overpay on their federal taxes every year by $500 or more, you know that the slightest mistake can cost you. Store your form in a safe place once it arrives and remember to bring it to your accountant when you file your taxes.

2. Home Improvements

If you pay for renovations on your new home, there are two ways you could qualify for deductions. The first is by using a home equity loan, or another type of loan secured by the value of your home, to finance home improvements. These loans qualify for the same mortgage interest deductions as your main mortgage. Some people may prefer to pay in cash for a renovation to avoid taking out another loan in their name, but not everyone has the cash to cover the average $35,000 it costs for a basic basement renovation. If you take out a loan to finance this large expense, remember to claim the interest deductions.

The second way to qualify for deductions through renovations is to keep track of your home improvements until you sell the home. So if your home was one of the 15 houses in the United States estimated to have radon levels at or above the EPA action level and you installed a radon mitigation system when you first moved in, keep those receipts. When you sell the house, you can include the cost of the system and other improvements you make to the property in the cost basis as you determine your capital gains or losses on the sale. Any extra money you get if your home sells for more than you paid for is considered taxable income, but you can lessen this tax liability by writing off home improvement costs.

3. Mortgage Credit Certificate

One of the hardest parts of buying a home for many renters is finding the budget to afford a down payment and make monthly mortgage credits at the same time. In fact, over 50% of renters consider renting a better choice for living within a budget and having less stress. However, new homeowners may be able to combine the Mortgage Credit Certificate with the itemized interest deductions mentioned above and find a wealth of savings.

A Mortgage Credit Certificate is meant to help people in lower income brackets afford a home. As a tax credit, this benefit will reduce the amount of tax you owe. The state you live in will issue the certificate. Your financial need and the amount of the home you’re buying will determine the amount of your certificate. It differs from mortgage interest deductions because you can only take those if you itemize all of your deductions.

4. Home Office Deductions

If you use a home office for a full-time position, a side hustle, or anything in between, you can deduct your home office expenses and the space you use. According to the current tax law, you can take a tax deduction of $5 per square foot for up to 300 square feet of office space. This equals a maximum deduction of $1,500 just for working in the comfort of your own home.

Anyone who wants to take advantage of this deduction should be aware of the tight guidelines that surround expensing your home office. Be sure that the workspace information you provide is as accurate as possible. This information will include elements such as square footage, utility expenses, and any repairs you did to the office. When in doubt, talk to a tax professional about how to cash in on tax benefits from your home office.

5. Property Tax Deductions

In the past, homeowners were able to deduct the entirety of their property taxes from their federal income tax bill. With income taxes accounting for about half of federal revenue, or $1.688 trillion, this deduction could make a serious difference on homeowner’s income taxes. However, the Tax Cuts and Jobs Act of 2017 changed that helpful policy.

According to this new law, homeowners can deduct up to $10,000 of their property taxes. If you pay your property taxes through an escrow account with your lender — who adds them into your monthly mortgage payment and pays them to your municipality for you — your IRS Form 1098 will show the amount you paid in property taxes for the year. You can use that form to apply the deduction to your income tax. If you pay your property taxes directly to the municipality you live in, be sure to keep a record of the money you paid to deduct it on your income tax.

You’ll adjust to many things as a new homeowner, but not all of them will be negative or expensive. By taking advantage of these tax benefits, you can see some serious savings when it comes time to file your taxes. Start thinking about it now and your future self will thank you.

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