Real Estate & Taxes:

Tax Savings for People Who Rent

• A renter can take a home office deduction if he uses a part of the house or apartment exclusively for seeing clients or patients or doing his paperwork. That part of the house should only be used for business, even in after hours it can't be used as a den or a family room.
• Students may not be able to deduct their rent but they get two tax credits from the government. The first one is the HOPE credit, where they get a maximum of $1500 per year for an undergraduate student for the first two years of study. You are allowed 100% of the first $1000 of tuition for that student year and 50% of the next $1000 in tuition in tax credit. The student must be enrolled at least halftime. The second credit is the lifetime learning credit according to which 20% of the tuition fees up to a $1000 are allowed as tax credit. This is for professional level education only.
• You can also claim earned income tax credit if you made below a certain amount in the tax year. $10,200 for someone with no qualifying child, $26,928 for someone with only one qualifying child, and $30,580 for someone with more than one qualifying child. If you made less than any of the above, you qualify for the earned income tax credit.
• There is also the child tax credit for 1999 returns, where you get $500 for one child and $1000 for the two children and so on. This is a dollar for dollar credit meaning you get this money in your hands. Your tax credit is reduced $50 on every $1000 that your gross income is over $110,000 if married, $75,000 if filing single and head of the household, and $55,000 if filing separately but married.

Even though the IRS won't cut you a break on your rent, we hope some of the above apply to you and you are able to save some money.