Month: September 2025

Buying a home is one of the biggest financial decisions you’ll ever make. Beyond the excitement of this tremendous purchase, homeownership also makes available important tax deductions that can impact your overall tax bill. The tax advantages of homeownership can go a long way to reducing your overall bill at the end of the year. Mortgage interest deduction, property tax deduction, and points paid at closing can all significantly reduce the amount of money you pay in taxes.

A resident in Amherst had just purchased his first home. He was excited to begin this journey into homeownership and had many questions. One of these was whether there would be any tax implications regarding purchasing a home. Looking for information, he contacted the team at Merrimack Tax Associates.

Tax Deductions Available for Homeowners

One of the biggest tax advantages of homeownership is the mortgage interest deduction. If you itemize your deductions, you may be able to deduct the interest paid on your mortgage over the course of the year. For many homeowners, this can be one of the largest deductions they take each year. The IRS allows homeowners to deduct state and local property taxes, up to a combined limit of $10,000 for joint filers per year or $5,000 for those single filers. This deduction can help offset the cost of owning a home, particularly in areas with high property taxes.

The Importance of Maintaining Good Record to Take Advantage of These Deductions

While these tax breaks can add up, they’re only as valuable as the records you keep. It is important to save your closing documents, mortgage statements, and receipts for home improvements projects (these ongoing projects will reduce your capital gains tax when you sell the property in the future). Having thorough documentation makes it easier to claim deductions and ensures you don’t miss out on potential savings.

It is important to understand the tax deductions that buying a home can offer you. The new homeowner in Amherst was pleased to learn purchasing a home would now make him eligible for even more potential tax deductions. With this information, he will be ready to save when he goes to file his taxes at the end of the year.

There is a lot that goes into running a small business. One area that many small businesses commonly overlook is tax credits that they may be entitled to. Unlike deductions, which reduce taxable income, tax credits directly reduce the amount of tax owed. That means tax credits can provide real savings. Many times, small businesses are not even aware of these potential tax credits, leaving them paying more in taxes than they should.

A small business owner in Nashua was concerned about the amount of her business’ revenue that was going to taxes. Hoping to find ways to reduce her overall tax bill, she contacted the team at Merrimack Tax Associates for recommendations.

Tax Credits Available for Small Businesses

Many business owners assume the R&D (Research and Development) credit is only for tech companies or large corporations, but that is not the case. If your business develops new products, improves processes, or creates prototypes, you may qualify for this credit. Even activities like testing new software, improving packaging, or streamlining operations could make you eligible for this money-saving credit.

If you have hired employees from certain groups that face barriers to employment, including veterans, long-term unemployment recipients, or individuals receiving government assistance you may qualify for the Work Opportunity Tax Credit. This credit is worth up to $9,600 per employee, depending on the category and hours worked.

If you’ve made your business more accessible to customers with disabilities through improvement projects such as installing ramps, modifying restrooms, or providing accessible technology, you may qualify for the Disabled Access Credit. This credit is designed to help small businesses cover the costs of compliance with the Americans with Disabilities Act.

Starting a retirement plan for your employees doesn’t just benefit them, it can also benefit your business. The IRS offers a tax credit to small businesses that establish retirement plans like a 401(k) or SIMPLE IRA for employees. This credit helps cover the setup fees and administrative costs.

Tax credits can provide significant savings, but many small business owners miss out simply because they don’t know what is available. Each credit comes with specific rules and qualifications, so it is important to review your situation carefully. The Nashua business owner was pleased to learn about these potential tax credits that can reduce her tax bill in the future.